[quote davelj]First problem: the only reason a bank has to hold back a percentage of its assets as “reserves” (or, my preference, “liquidity”) is because those reserves are there to ensure adequate liquidity for depositors. In the example above, you assume no deposits, therefore no reserves would be necessary. So we’ve got a fundamental misunderstanding to rectify before moving forward.[/quote]
As I mentioned, I drastically simplified it.. maybe too much. As I was going down the path to try to describe why a bank would require more fed money than their ‘market cap’, I realized that if I threw a lot of stuff in, I loose the ‘banks are making a mint off the loan’ people, so I had to isolate the description to the bare minimum to show what would happen. The initial all ‘paid in capital’ could also be the starting/founding position for a bank before the doors open. – so at this point I’m done. I am not going to continue this game of yours. You have the floor, you can decide to show an accurate rendition that average people could follow, or continue to try to berate me on this public forum. What you decide to do probably reflects more on you than me.
