[patriciacolling]

But didn’t the Fed lend money to the banks at close to zero percent interest? Didn’t the Fed create that money out of thin air to lend? Or is it just the checking account balances the Fed creates when it acquires banks’ assets that is its creation of money? What is the Fed lending out when it creates credit? Does it lend out already existing money? My head is starting to spin. Is there a difference between the excess reserves banks hold at the Fed and their checking accounts at the Fed?
Your first paragraph begged another question–Do people actually hold so much money in their checking accounts to have allowed the banks to lend out 90% of it? Why don’t they put it in savings accounts or C.D.s if the balances are 90% above their spending levels? I understand a cushion but that just seems like stock piling–which may indicate some kind of fear or indecisiveness, I guess–is that bad for the economy in an Austrian view?
Also, savings accounts seem to be more or less demand deposits–maybe they require a balance of sorts but anything above that can be used as an emergency fund or whatever. Is that the idea? Are the percentages of fractional reserves different for checking accounts, savings accounts and C.D.s? I would think so.
Anyway, I guess what I was asking in the first post is: Are there any loans that the Fed has made that it can call back? And does it already have in its possession the collateral?
I believe your answer was no–or maybe it just was, that would be too destructive. Or just that the reserves are not collateral for the loans but payment for assets sold to the Fed.?