"Where did the IOU come from? Was it created from thin air? More or less."
as I said you only read what you want to read. there is more to the article but you don't post that because you are dishonest.
What am I going to do about it? I am going to continue making you look foolish with your own sources, that's what.
so you still don't have an argument. thanks I can now ignore anything you say.
The point of the paper is that, despite what some people think, banks cannot just whip up a bunch of profits out of thin air. i.e., they are not "self-funding," like the U.S. government is. But banks do create loans out of thin air, and these loan proceeds constitute the vast majority of M1/M2. It is most of the money we all use in day-to-day transactions.
While there is truth in this metaphorical claim, the metaphor can also be seriously misleading, and leads some to attribute powers to commercial banks that are actually retained by the government alone under our system.
No, banks are not self-funding, either individually or in the aggregate. The “out of thin air” language, while containing elements of truth,
can be extremely misleading, and people using this language sometimes woefully under-represent the significance of central bank liabilities and the government in the US financial system.
The article specifically addresses people like you amazing how you didn't read that.
And these bank debts are not just so-called debts or pro forma debts. They are real debts which banks must and do routinely pay off in the course of doing everyday business; and the assets a bank uses to pay these debts come from sources external to the bank. A bank cannot simply manufacture its own payment assets from thin air.
People who are fond of saying the banks create money “from thin air” often seem to suggest that banks are no different than the government in that regard, and can thus obtain valuable monetary assets simply by manufacturing them ex nihilo, in effect profiting from pure seigniorage in the way a currency-issuing government can. But this picture is wildly inadequate.
But it is crucial to recognize that banks do not and cannot simply manufacture their own assets – whether from thin air or otherwise. What they manufacture are liabilities; that is, debts. And they obtain assets from external sources, mainly by trading debts for debts.
Fractional Reserve Banking Definition | Investopedia
again proven wrong.
you should probably do more research and less arguing with people.
as much as you shout at other people your claims simply are just
non-existent.