"Actually in reality banks are never reserved constrained, that is, they can always make loans if they have credit worthy customers, loans create deposits. In the world we live in (not the economics textbook fairyland) banks need a certain amount of reserves in order to ensure smooth settlement of the plethora of draws on, and deposits into and out of a certain bank on any given day. They need depositors and lenders to ensure capital adequacy, not so they can lend it out in fractional reserve, money multiplier mumbo jumbo."
This is not Mumbo Jumbo.
This is reality. Your wording just camouflages what is really going on. 4% is minimum reserves of leverage. Up to 9.5% is needed for future constraints you are talking about so they can run their business day to day and for future shocks.
Asset prices(Homes) are needed to increase and double every 8-10 years on average around CBD's to help keep this Pyramid Ponzi scheme going.
With their financial engineering they have managed so far to do it and will continue to do so into the future IMO.
The profit from someone selling is banked but the other person has the debt. Hence no free dollar in the system as the money created has debt attached.The depositors cash is then leveraged again and again by banks through their depositors.
Please, I don't want to get into this any deeper. They have money aside for their day to day transaction but their lending is all based on Tier 1 ,2 &3 reserves that they leverage off in to thin air(Digital Domain).
