>fractional reserves doesn't mean that banks "loan out more money than they have on-hand". That's exactly what it means. When you go to the bank and ask for e

>fractional reserves doesn't mean that banks "loan out more money than they have on-hand". That's exactly what it means. When you go to the bank and ask for e.g. $100k to buy a house they make an account entry to first create this money (assuming doing so wouldn't put them past their reserve threshold) and then give it to you. The money only exists because you've promised to pay it back. Put another way, the loan money they're giving you is like they went into the future, took all the money you paid into the loan account, deducted their fees, etc. came back to today and gave you what was left over.