Where does money go in a recession?

[septimus]

@Mijin

They are simply conjuring money at will, so it doesn’t even matter to them if I can’t pay them back.

:smack:

Mijin gets a checking account, cashier’s check or line of credit for $100 million dollars, spends it all on hookers and blow, but the hookers and blow dealers present the check(s) for payment and the bank, under banking rules, is obligated to redeem.

If we were in BBQ Pit I’d write “What!!? Is this a contest to see whose understanding of simple banking is the most confused ?”

[Mijin]

@septimus

:smack:

Mijin gets a checking account, cashier’s check or line of credit for $100 million dollars, spends it all on hookers and blow, but the hookers and blow dealers present the check(s) for payment and the bank, under banking rules, is obligated to redeem.

Exactly. Remember you are the one who has said that commercial banks create money, and furthermore that they don’t need to back it with anything, not I. A hundred emoticons won’t change that.

[septimus]

@Mijin

Exactly. Remember you are the one who has said that commercial banks create money, and furthermore that they don’t need to back it with anything, not I. A hundred emoticons won’t change that.

Fine. I realized as I was replying that yours was intended as some reductio ad absurdem. Problem is, you’re debating a strawman of your own design.

Where did I write “they don’t need to back it with anything”? … And even if you infer that possibility (e.g. from my apple IOU analogy) what does it have to do with the question under debate?