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Value isn’t a zero-sum game. Disregarding inflation, money is. Fractional-reserve banking can only increase the money supply by a finite amount. I’m also puzzle
by DATACOMMANDER 8y ago
Value isn’t a zero-sum game. Disregarding inflation, money is. Fractional-reserve banking can only increase the money supply by a finite amount. I’m also puzzled by the notion that loans create new money.
- fwip 8y agoAgreed. I guess you can argue that loans put money back into circulation, but the obvious corollary is that rich people hoarding money effectively destroys it.
- monkeynotes 8y agoLoans just put debt into the economy, while the rich monopolize the credit.
- imtringued 8y agoThere is no limit in how many loans a central bank can give to regular banks because the central bank doesn't have to be backed by deposits, gold or any other scarce resource.