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Banks are private companies and they create money all the time when they make loans.
by jobigoud 9y ago
Banks are private companies and they create money all the time when they make loans.
- apo 9y agoFor those who don't understand or believe this to be true, listen to the bankers themselves: https://www.monetary.org/wp-content/uploads/2016/03/money-creation-in-the-modern-economy.pdf https://www.monetary.org/wp-content/uploads/2016/03/money-cr...
- tootie 9y agoBanks leverage money, they don't create it. Only the Fed creates it. And the Fed and all it's chartered banks are routinely audited.
- LargeWu 9y agoThere's a major difference between fractional reserve banking and printing money. The former is a well-understood and well-regulated practice that actually drives economic activity. The latter is likely what Bitfinex is doing with Tether, is 100% counter to their stated practices, and serves only to artificially drive up the price of other assets.
- whataretensors 9y ago> The former is a well-understood and well-regulated practice that actually drives economic activity There's a lot of money in convincing people this is true but I have my doubts.
- LargeWu 9y agoCare to enumerate your doubts? It's a pretty well established concept in economics.
- wglb 9y agoNo, the money existed and they transfer that money to the person taking out the loan.
- ric2b 9y agoYou should look up what fractional reverse banking is. You deposit $100 and they lend it out to 10 different people (or more, depends on the legislation limits), effectively creating $900 extra dollars while those 10 loans remain open.