22 ms·
I suspect the argument is that when $BIGCORP puts $1t in the bank, the bank gives out $900b as new loans
by isostatic 8y ago
I suspect the argument is that when $BIGCORP puts $1t in the bank, the bank gives out $900b as new loans
- mo1ok 8y agoAh, I see. Good point.
- eli_gottlieb 8y agoI think investment is actually a measured variable.
- madhadron 8y agoBut that's not how money works. Banks don't loan money they have on deposit. They loan money they create from thin air, and are required to have a certain amount of deposits to potentially cover that if their exchanges with another bank become too imbalanced. That's what's called "leverage."