Your guesses aren't very good.
A percentage became an assest for the bank. A percentage went into the banks reserve.
No. The entire mortgage loan is an asset. The bank's deposits are liabilities, but that's not where I'm going.
How am I doing so far?
Not so good.
Say your bank has $1,000,000 in deposits. You come looking for a $200,000 mortgage loan. They loan you $200,000 and the home seller takes his $200,000 and deposits it in the bank. Now the money supply is $1,200,000.
Same thing if you took out a car loan. You increase the money supply and Greenspan and Bernanke didn't have to co-sign or even know about your loan for the money supply to increase.
The Fed can influence but not control the money supply. Questions?
“The Fed can influence but not control the money supply. Questions? “
No. I’m satisfied. Since you admitted the fed influences the money supply. Typically, anyone or any entity that is adept at influence, will in effect, have control.