[Patient0]

> There is a massive difference. Other people can make use of funds deposited in accounts. This is why banks take in deposits, to lend it out at a higher rate and pocket the spread."

Only because of fractional reserve banking. Absent fractional reserve banking, if I 'lend' something to another party but reserve the right to demand it back at any time, then there is simply no way that they can "use" what I have lent them. They can't use the money while still honouring my right to demand the money back at any time.

So "money" which can be demanded back at any time has he same status as money kept under the mattress - it can't be profitably "used" by anyone.

The important point about "investment" is that the money trully is "tied up" - if only for a day. The shorter the term, the more like "cash" it is.

> Highly likely you agree with Krugman. I think he speaks out of his hat. We'll leave it at that.

You're right I do agree with Krugman (for the most part). I've been reading his blog since 2007 and you know what, he's been right in his predictions pretty much the whole time!

If you think Krugman is speaking out of his hat, who do you recommend instead?