You have not provided an argument. You have not explained how a bank works. but you say I am wrong. I would say that down voting makes sense. This is reminiscent of your unwillingness to listen how antennas work.

It just requires a people who actually WANT to rule their own lives. There are a lot of people who are content to just do what others dictate. Those are the people for whom a free society are a burden. Those are the ones for whom a dictatorship or communist society is preferable.

Robbie, once again you prove your ignorance. You don't actually make an argument. Accounting does not tell you how banking works.

I have had this exact conversation with the Presidents of banks, economists and others and yes this is how it works.

It is exactly how banking works. Taking an accounting course, which I have does not explain banking at all. You should read book the Assent of Money and then you will understand money and banking better.

When the bank makes a loan it takes a legal interest in land, cars, and other property. It converts this legal interest into notes (which is just like issuing a bond). Thus the paper notes are backed by the land or the car or other property that the bank has a legal interest in. If the borrower defaults on the loan, the bank takes the property and sells it for cash.

The person taking out the loan is in exactly the same position as the company issuing a bond. The only difference between a bond and the notes is that the notes are backed by all the banks loans, not just the loan to a particular person.

Sorry, db, not able to understand what collateral you refer to. What land, cars, property and what is the written contract that pledges them as collateral? Do you mean the contact between the bank as lender and company/individual as borrower? Please explain. Thanks.

It is exactly the same thing. The bond is exactly the same thing as paper notes. The paper notes represent real assets also. They represent the land, cars, and other property that has been pledged as collateral. The only difference is that the paper is backed up by multiple legal entities instead of just one.

Db, from your original remarks about Hamilton, are you saying that you believe that Hamilton actually wanted a fair free market banking system?

If your point is only that parties in a contract can create instruments to allow trade, then I agree, but that is not the same thing as creating money as banks do.
The banks in fractional reserve system don't own the assets to secure the money they create. The money is accepted because it is decreed as legal tender and only confidence (based on deceit) makes it acceptable in trade. The bond can be exchanged for other property only because it represents real tangible property in an enterprise. There is a massive difference between money created with a tiny percentage of assets backing it and a bond backed by specific property.
If you are saying that banking in a free market with real assets pledged for the notes issued is a valuable concept, I agree, but that was not the system that Hamilton intended. He represented the interests of a cartel of bankers and Jefferson recognized that as the antithesis of the free association of the American colonies.We can see the result of opening the door to that system today.

see above also. A company floats a $1000 bond. You buy the bond, lets say with gold. The company does not hold the gold it uses it to buy equipment and other stuff (not 100% reserve ratio). Now lets say you need to pay me $1000. As long as the company is paying on its bond and looks like it will continue to do so, then I will take the $1000 bond as payment. The company has printed money just like a bank. The bond is just a legal piece of paper and acts just like currency,so they created money out of thin air (or paper or electronic digits really)

This was a common game in real estate before they started adding clauses to mortgages that they were redeemable upon transfer of the ownership of the houses. People would give second and third mortgage plus pledge the first mortgage to the new buyer of the house. The seller created money out of thin air in the form of a second mortgage.

I spend the $100 and you still have $100 bond, which means we created $100. That is exactly what a bank loan is. You pledge your car they give you $100 in notes, You spend the notes. You and the bank have created $100.

But in a free marketing banking system the money created is always backed by an asset. If the banks makes bad loans then the amount of money decreases when they cannot be paid back. So the money supply is inherently tied to the size of the economy. Of course we do not have a free market fractional reserve banking system.

Db, please explain how bonds do this. The only way I see any money creation by bond issuance is if the fractional reserve banking system exists and the banking system then creates money when the fiat paid for the bonds is deposited (and spent and deposited with more money created from nothing again and again in every iteration.) Bond issuance only transfers money from one party to another. The only thing it has in common with the frb system is that the interest to be paid has to be created somehow in some form. If it must be paid in fiat 'legal tender' then it can't be paid because it has not been created (unless it is done outside of the bond trading parties.) If the economy expands because of the bond transaction financing a business activity, then there must be a method of expanding the currency supply or there will not be enough money tokens for the economic system. A free market would respond with non legal tender methods of exchange between trade participants.

Sorry, kh. I was discussing with db. Needed some glasses when I read your reply. Mistaken identity ;^)

Robbie do a little homework. They are absolutely the same thing.

I made one statement. not multiple statements. start from my question I guess

No worries, just trying to understand your original statements apparently in support of Hamilton. Want to start from there again?

wait. I didn't....did you think this whole time you were arguing with me? lol can you repeat the difference for me?

Sounds like a good book! Thanks for the recommendation.

You compared fractional reserve banking (Hamiltonian banking policy) to corporate bond issuance and said they are the same. I said they are not and stated an important difference.