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When a mortgage is secured the bank isn't using its money to pay for the house. Instead, it creates the debt out of nowhere and charges you interest for money t
by bluthru 8y ago
When a mortgage is secured the bank isn't using its money to pay for the house. Instead, it creates the debt out of nowhere and charges you interest for money that isn't at risk.
Maybe someone with more knowledge than me can explain why banks shouldn't have to buy all of their money from the government like they do with physical currency.
- rootusrootus 8y agoThe pros and cons of fractional reserve banking are way beyond the scope of an HN conversation :). I'm aware that some people are intensely uncomfortable with the concept, and I know that there is a good argument to be made that we have created vastly more wealth with it than we would have without. Even if there seems to be some downside risks.
- bluthru 8y agoWhat's the downside to requiring banks to purchase money from the government? Does it outweigh the benefit of the public wealth that would be created?