Comment: I copied your reply and I

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I copied your reply and I

I copied your reply and I deleted everything that had nothing to do with what I said, and will reply to the bare bones that's left if anything.

>...there is a money multiplier in the form of loans in any factional reserve system.<

When I said there's no money multiplier, I mean that a dollar of reserves/base money does not lead to 9 or 10 dollars in bank money, as the myth goes that T. Woods repeated.

That's demonstrated pretty obviously by the excess reserves and the empirical studies that have been done showing that bank money expands endogenously and is followed later by reserve provision.

>By definition of the reserve requirement the loans could not grow faster then the reserves.<

False. If a bank is short reserves it borrows them in the open market. If there is a system-wide reserve shortage, the FFR goes above target and the Fed adds reserves. Reserves lag credit expansion w/ a lag as has been shown in empirical studies and acknowledged even by the Fed. Only fools are clinging to the textbook multiplier myth that has been exploded for years.

>>You are right that the banks do have trillions in excess reserves right not, but the reason is far from what you stated.<<

I didn't state a reason.

>> The Fed decided to pay interest on reserves. This is part of “quantitative easing” few understand.<<

They're paying IOR to prevent the FFR from dropping below target due to excess reserves. I didn't say why there are excess reserves or mention QE because it isn't relevant to the point of my post. Let's try not to lose focus.

>>A loan by definition in a fractional reserve system is a money multiplier.<<

Its arguable whether we have a FRB system. I won't argue it here. Money multiplier in common parlance means a dollar of reserves will lead mechanically to the multiple in loans. This is what Woods said and what I objected to. You are perhaps working w/ a different definition. There is clearly no money multiplier by that definition and this should be obvious to any competent observer.