@Gerard Borg “>Let’s start by noting, you have found no errors in 1-8 outlining the U.S. monetary system, so to be intellectually honest, you should admit these are true as stated. Same for 9-24 regarding the U.K.<<” “>>Again, my points are math, not philosophy<< Your points are neither math nor philosophy. They are ideological. Please highlight specifically which points are ideological? “I will remind you that you have not responded to my criticism.” Please summarize any criticisms I have not responded to, and I will respond. “Did you mean: >>One day when someone like Richard Murphy admits to exactly what I am saying, you will agree. And very likely say you agreed with MY views the whole time!<< To be clear: Richard Murphy will admit to what you're saying precisely when Keen and Kelton do but I wont be holding my breath for that to happen.” Murphy never will, I have found in my emails with him, similar to you, he simply is unable to slow down enough to think through what I am presenting. Kelton has not responded, so Steve is my best chance, and he and I will review again in July. I don’t think it’s that complicated, but everybody sure seems like they can’t understand it. 1. Do you understand that a currency issuer ALWAYS issues new currency as a Liability of the issuer? Y/N? 2. And that ‘reality’ means if there is no additional action, new Liabilities result in a reduction in issuer Equity? +L (+currency) = -Equity Agreed - Y/N? 3. In order to avoid negative Equity, the issuer must use their newly issued currency to buy new Assets: +Assets - (+Liabilities) = No change in Equity. Agreed - Y/N? 4. Looking at A -L = E, there are no other options for a currency issuer than 1 or 2 above. Agreed - Y /N?

@Gerard Borg “Figure 7 because CB spending by buying assets from banks is not shown in the figure and is a far cry from K-K's statement” Agreed, there is no Reserve creation in this chart, and that is part of what is missing and why it’s wrong. It’s right in that new Treasury spending is creating new negative Equity for Treasury, agreed? +Reserves = -Equity “If you look at Figure 7 of K-K you can see that A applies: the Treasury is creating new bank reserves and private deposit assets with NO change in CB liabilities” This paragraph has everything we need to resolve the confusion. “Treasury is creating new bank reserves” You are at least seeing clearly now, which is real progress. I think there us a real chance you will finally understand exactly what I have been trying to show you. Please explain per fig 7 how the Treasury can start with zero reserve account credits, and the BoE has not issued any reserve account credits, but Treasury ends up creating new reserve account credits? Snd then spending those new Reserve account credits? Aren’t bank Resetves just reserve account credits liabilities on the BoE’s ledger? Do they exist anyplace else besides on the BoE’s ledger? Check 1 and 2 on my previous post. There are only two options for a currency issuer: 1. BOE issues and spends their Equity 2. BoE expands their Balance Sheet to issue Fig 7 shows neither of those, agreed? Or as I have stated earlier, if Treasury issued a USDC: 1. Treasury issues and spends their Equity 2. Treasury expands their Balance Sheet to issue I contend fig. 7 is showing the DEBk for Treasury issuing by spending, #1 directly above, which is sound, and is what MMT has said us possible, and under this accounting, tax payments in USDT and bond sales that receive USDT de-issue that currency. All of this works exactly as MMT says, but only if the currency is issued as a new Liability of the issuer by spending on goods and services as a negative Equity.

@Gerard Borg remember, New Reserve creation always means Central Bank Balance Sheet expansion..

@Gerard Borg So to be clear. Do you agree that the McLeay paper "only describes one-half of the monetary engine." No. “and it fails to address the fiscal side of the ledger” Explain what this means to you. “where government deficits create money directly” This ‘statement’ is not backed up by any math or accounting. And when we check the forensic accounting, there is no evidence that deficit spending increases either deposits or reserves, other than what I have outlined when banks buy the bonds and the Gov spends. I am not talking philosophy, I am discussing the math. 1. From an accounting perspective, an issuer can issue currency as a Liability with no corresponding Asset acquisition, which is spending their Equity: Equity = Assets -Liabilities +Liabilities (+reserves/fiat) = 0 Assets - Equity +Fiat = - Equity Central Banks never do this or they become insolvent within days. 2. Or an issuer can expand their Balance Sheet to buy new assets, which creates new money. Equity = Assets - Liabilities 0 = HQLA - Fiat +Liabilities (+reserves/fiat) = +Assets (+HQLA) You have never provided an accounting framework showing how in the U.S. today, new money is created by deficit spending. In England, the Treasury can borrow if they ALSO expand their Balance Sheet along with the BoE. So the BoE is creating new money through Gov deficit spending. Unfortunately, the BoE says this has not happened in 18 years. That means it is not required, the Gov is deficit spending every year, but without creating any new Fiat, and as mentioned banks create a very small amount of new deposits, 2% - 5% of the bond sale. This is not the Gov creating new money to spend, this is the result of the Gov incurring negative equity through new financial assets they owe, and transferring equity to the public. But the new equity is NOT the bonds, the public buys those as an asst swap, agreed? The new equity is the new deposits the public would not have had without Gov deficit spending, and those new deposits are the result of the Gov borrowing existing money from the public, then spending it +Equity public, and long run the government has to repay the public -Equity Gov.

@Demetrios Gizelis spittin’ straight talk! NBT - Nothin’ But the Truth! You should publish this somewhere… Amen brother!

@Ellen Braddock Thx Ellen. Have you read the attached article? Were you aware ‘Banks create deposits when they lend.’

@Gerard Borg “We are going around in circles. When you asked me questions I gave answers. You need to address my responses.” I asked you follow up questions, which you ignore. That’s why you are not learning, you are not thinking it through all the way…and that’s because you are not answering my questions. If you did we’d be on to the next topic 6 months ago! “Bank reserves and NBNFS deposits both increase after deficit spending.” No. Reserves are Fed Liabilities, and are transferred from TGA to banks, no net change, no net increase. Banks had previously provided 100% of all reserves in the TGA through taxes or bond sales to the public, so 100% preexisting reserves transferred to TGA, received by TGA then spent, hence Liability Swap. No net new reserves. Deposits were reduced when customers via banks paid taxes or bought bonds, which is how the TGA was funded by receiving the underlying existing Reserves. When the TGA spends those reserves, they are returned to the banking sector, which is where they were created by the CB expanding their BS to accommodate banks swapping their assets for reserves. Simple. No new net reserves. No new net deposits from public taxes or bond purchases after TGA spends these funds. Literally “borrow then spend.” Only net new deposits or net increase in the money supply is from banks buying and holding bonds, which transfers reserves to the TGA, and then TGA spending those reserves. This results in banks expanding their liabilities and creating new deposits for customers, which expands the money supply.. I have been saying exactly this for 6 months, and provided you charts in the summer showing you, who buys the bond matters, as it determines the net effect on deposits. If you believe your model shows deficit spending creates new reserves, you have to know ‘why?’ And Who? When? What’s the DEBk for that creation? Providing a colored chart is not explaining why. Until that time it looks like a modelling error on your part, and I am not arguing with you about system dynamics, no new rabbit holes, only money mechanics.

@Gerard Borg “Show this using Ravel OR show how what you say happens in my Ravel.” You last ravel we discussed showed no new net Reserves after Treasury deficit spending, or after Gov spending. Remember? It was much simpler to show you the Truth. “This ignores causation (Ravel system dynamics) - should be "Deposits were reduced when customers via banks used bank deposits previously created by TGA spending to pay taxes or buy bonds." Atomic transactions. Banks create deposits when they lend, not the Treasury. The origin of the process is Treasury receiving tax revenue. It repeats annually. Every year, Tressury has no money, then receives tax payments. There was no Treasury spending prior to the public paying taxes, agreed? Same for next year, agreed? Same for bond sales, no deficit spending by Treasury until the TGA is pre-loaded, which only happens when they sell bonds. “>When the TGA spends those reserves, they are returned to the banking sector, which is where they were created by the CB expanding their BS to accommodate banks swapping their assets for reserves.<<“ “Inaccurate. If I try to translatre my Ravel into the language that we have been using then it would read,” “When the TGA "spends", the Fed transfers Transfer is a word you use to move something from one place to another, in this case Ressrves, so a ‘transfer’ of reserves.. “a portion of the TGA balances to banking sector reserve accounts of targetted banks belonging to the targetted recipients. “ Yes “These newly created Created implies ‘newly created’ Ressrves. This did not happen, and you can’t have a transfer and then creation, one or the other. “bank reserve assets are offset” No offset, that’s a specific term in accounting. “by newly created bank deposit liabilities corresponding to the deposit account assets of the targeted spending recipients." Bank BS expansion. “The bank reserves and deposits are new money.” Same mistake over and over and over. Deposits are new, but not Reserves.