[danielmarkbruce]

They are certainly related. The reason the deposits aren't sitting there is because they went flying out the door to fund the loans the bank made. If the bank could just fund loans out of thin air, they wouldn't need bank deposits in the first place.

Just go look at the balance sheet of a real bank. You'll see it all balances very nicely - there are assets (mostly loans to businesses and consumers), liabilities (mostly deposits) and shareholders equity (mostly money shareholders put up). Here is one to look at:

https://www.sec.gov/ix?doc=/Archives/edgar/data/72971/000007...

All those 100's of billions of loans on the books are funded.

Money comes in, money goes out, nothing much has changed in 1000s of years.

[User23]

> Just go look at the balance sheet of a real bank. You'll see it all balances very nicely

The first rule of tautology club is the first rule of tautology club. By definition double entry bookkeeping always balances no matter what the operations are. This example in no way refutes the parent claim. Furthermore, the banking system must be reasoned about in aggregate. The entire banking system in the USA is a creature of Congress, and every bank is a member of the Federal Reserve system that Congress created. While a given bank may fail due to the arcane shenanigans of the banking guild, the system in aggregate cannot fail unless Congress itself fails.

[danielmarkbruce]

Sure... you kind of left off the rest of the sentence there...In this case, what is the "it"? Ie, what specifically are the assets and liabilities?

In this case the loans are largely balanced by deposits. That was the point, and it does refute the parent claim.

If money was made up like folks are suggesting in this thread, then the items making the balance sheet balance would be... something else. I don't know, because it's such a stupid idea.