But this only works if they can count money as loaned and deposited at the same time. That is, if the system were sound, if they loaned out 80% of the money on

But this only works if they can count money as loaned and deposited at the same time. That is, if the system were sound, if they loaned out 80% of the money on deposit, that money couldn't be counted as still on deposit, but they do count it that way. A neat chart that shows this is: http://en.wikipedia.org/wiki/Money_creation#Money_creation_through_the_fractional_reserve_system http://en.wikipedia.org/wiki/Money_creation#Money_creation_t...