What he's talking about is called the money multiplier. http://en.wikipedia.org/wiki/Money_creation#Money_multiplier http://en.wikipedia.org/wiki/Money_creation

What he's talking about is called the money multiplier. http://en.wikipedia.org/wiki/Money_creation#Money_multiplier http://en.wikipedia.org/wiki/Money_creation#Money_multiplier It's taught in basic econ 101! Although it's a big house of cards, but since in today's age of almost everyone using the debit, credit & gift card instead of cold hard cash, it's very true reality. Also, it's the not the same bank, but the entire banking system as a whole that allows the money to "multiply". And todays reserve ratios are ridiculously small, in the 1% area.