On Mar 24, 2013, at 11:15 AM, Doug Henwood wrote:
> On Mar 23, 2013, at 11:58 AM, Lew <wsm_mod at yahoo.co.uk> wrote:
>> Shane Mage wrote:
>>>> Doug Henwood wrote:
>>>> Banks know they need deposits, otherwise they have nothing to
>>>> lend...
>>> Except that the deposit is *created* by the loan.
>> If this were true then no bank would ever go bust or get into
>> difficulty - they would simply create the necessary deposits by
>> making loans.
> No kidding. Banks make loans and create deposits but then they have
> to fund them (which is the way the sequence often works in the real
> world). If they can't fund the loan, they're fucked.
And what are central banks for? chopping liver?