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It's common understanding. It's also completely wrong. Banks are money factories, not warehouses. When you go for a loan the Bank creates the money for you on
by neilwilson 9y ago
It's common understanding. It's also completely wrong.
Banks are money factories, not warehouses. When you go for a loan the Bank creates the money for you on the spot. DR Loan Assets, CR Deposits.
We pay for things by swapping somebody else's liabilities with each other.