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Actually, that's exactly what happens when you take out a loan. It just doesn't look like money creation because everything evens out in the bookkeeping.
by gozur88 10y ago
Actually, that's exactly what happens when you take out a loan. It just doesn't look like money creation because everything evens out in the bookkeeping.
- tedunangst 10y agoI think there's a semantic gap here. Can a bank with no depositors originate a loan?
- gozur88 10y agoNo, it can't. They definitely have rules to follow, but that doesn't mean they're not creating money. Let me ask you this. Let's say you have a bubble and the economy grows to twice is pre-bubble size. What are people worried about - inflation or deflation? When an economy grows, shouldn't deflation (in this case meaning a drop in price for the same items) be the problem?