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Banks will money into existence every time they issue a loan. https://en.wikipedia.org/wiki/Money_creation https://en.wikipedia.org/wiki/Money_creation When I
by throwawaymsft 8y ago
Banks will money into existence every time they issue a loan.
https://en.wikipedia.org/wiki/Money_creation https://en.wikipedia.org/wiki/Money_creation
When I deposit $1k in the bank and you take a $500 loan, $500 is created out of nowhere. You are using my deposit yet I still have a balance of $1000 on the books.
- wasdfff 8y agoBanks cant will money into existance. If you withdrew your money the bank has to pay you from other funds. During the great depression banks collapsed this way, the only thing stopping that today is banks have enough funding to buffer people withdrawing from their accounts.