This is how the system works. There's a limit to that practice (the money multiplier), which is one of the reasons why banks need to rotate money as you said (a

This is how the system works. There's a limit to that practice (the money multiplier), which is one of the reasons why banks need to rotate money as you said (another being cross-bank transfers). See this link: https://en.wikipedia.org/wiki/Money_creation#Credit_theory_of_money https://en.wikipedia.org/wiki/Money_creation#Credit_theory_o... It's a very counter intuitive concept that underpins the entire economic system. It was even a subject of a (failed) Swiss referendum recently: https://en.wikipedia.org/wiki/2018_Swiss_sovereign-money_initiative https://en.wikipedia.org/wiki/2018_Swiss_sovereign-money_ini...