No such thing as fractional reserve banking

Loans create deposits. Ignoring private money creation by banks in macroeconomics is a huge mistake as #FAKEMMTers do. More “printed money” for Soviet Style Job Guarantee or Universal Basic Income means more loans that will NOT create deposits for the 95% but rather the top 5% who are the savers. (The Neo-Liberal Agenda.) That leaves the 95% with the burden to pay off the loan while the top 5% enjoy all the savings.

FAKEMMTERS complete ignore the functional (95% debtors) and nonfunctional (5% savers) parts of the private sector. Because it is oversimplified to Gov’t debt = private sector assets and everyone cheers. Not realizing the only ones who should be cheering are the top 5%.

Loans that create deposits – debt repayments leaves us with Net Debt Financial Assets (NDFA). Thus Net Financial Assets (NFA) (Gov’t deficits) are the base money for NDFA.

So the 95% spend NFA + NDFA that all flow to the savings bubble. The top 5% who are the real savers. Then they go out and speculate in various asset classes. Where all the inflation takes place and not the Functional economy.

Only when Gov’t runs a surplus that NFA can only be “destroyed” and When Loan growth contract and repayment continue to pay down the loan that NDFA can be “destroyed”. FAKEMMTERS do not realize this little fact and run around saying taxes destroy dollars. WRONG! Only Surpluses and Debt repayment can destroy dollars into thin air.

How you repay a bank debt? Payback the amount outstanding plus interest. Who? The debtor. 95%

How you repay Gov’t debt? Run surpluses to pay back the amount outstanding. Who? The debtor. 95%

NOT the 5% who are the savers.

Simple basic 3rd-grade math.