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>Therefore, if you borrow £100 from the bank, and it credits your account with the amount, ‘new money’ has been created. It didn’t exist until it was credited t
by numakerg 7y ago
>Therefore, if you borrow £100 from the bank, and it credits your account with the amount, ‘new money’ has been created. It didn’t exist until it was credited to your account.
If that £100 is spent into the economy but is not returned, did the total volume of available £100 not increase, reducing the buying power of any £ stores? Perhaps it is not a tax because it isn't used directly by the government, but it is a burden that such a lender can enforce upon currency holders with the authority that is given to it by the organization controlling the currency.
>entrepreneurs who think they can do better are free to launch competing financial services.
Entrepreneurs cannot lend out money they never had. How difficult is it for a new company to obtain a piece of the volume of money that the currency regulator deems available for creation within a timeframe?
- JumpCrisscross 7y ago> If that £100 is spent into the economy but is not returned Loans create deposits. The only way the deposit isn’t returned is if capital is destroyed. > Entrepreneurs cannot lend out money they never had With a banking license, yes. They can. Once you have a banking charter, you can lend to your heart’s content. At the end of the day, you borrow to make your reserve requirement. (If you’re deficient, you die.) Lending creates deposits. Not the reverse.