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Comment by bhouston | Hacker News Reader

> In the normal business world it's a very bad sign when your auditor fires you as a customer.

My wife is a professional auditor and she said that this would only happen if the client was pushing for the auditor to certify something that the auditor wasn't comfortable with. Of course she has no direct knowledge of this case. She said it was a really bad sign and she almost never sees this happen.

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We also don't usually see a private company literally print money.

To be fair, isn't FED a private, non-federal company? :)

> isn't FED a private, non-federal company?

No. The Federal Reserve was created by Congress in 1913 [1]. Part of its complexity arises from its need to integrate public monetary policy with private capital markets.

[1] https://www.federalreserve.gov/faqs/about_14986.htm

It's quasi-governmental, in that it is chartered and overseen by the federal government, but largely executes policy without the influence of the executive or legislative branches.

> but largely executes policy without the influence of the executive or legislative branches.

Which, to be clear, is a good thing otherwise politics would start to win over sound economic policy...

Banks are private companies and they create money all the time when they make loans.

For those who don't understand or believe this to be true, listen to the bankers themselves:

https://www.monetary.org/wp-content/uploads/2016/03/money-cr...

Banks leverage money, they don't create it. Only the Fed creates it. And the Fed and all it's chartered banks are routinely audited.

There's a major difference between fractional reserve banking and printing money. The former is a well-understood and well-regulated practice that actually drives economic activity. The latter is likely what Bitfinex is doing with Tether, is 100% counter to their stated practices, and serves only to artificially drive up the price of other assets.

> The former is a well-understood and well-regulated practice that actually drives economic activity

There's a lot of money in convincing people this is true but I have my doubts.

Care to enumerate your doubts? It's a pretty well established concept in economics.

No, the money existed and they transfer that money to the person taking out the loan.

You should look up what fractional reverse banking is.

You deposit $100 and they lend it out to 10 different people (or more, depends on the legislation limits), effectively creating $900 extra dollars while those 10 loans remain open.

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