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RE: People don't understand money. We really should. We really should try to explain it super simply.

in #money8 years ago (edited)

when you get a loan from a bank, they immediately deposit it into your account AND loan out that massive amount they're allowed to now due to fractional reserve holdings.

By the time you can take out that $100 loan from your account, the bank has already duplicated the money so to speak. That's why there's a 'processing time' on loans- so they can make more money off the new capital assets they've created.

How is turning $100 into nearly $1000 through doing literally nothing not creating money?