3 ms·
No, they only loan out $90. But that is creating money. Where did that $90 come from? It didn't come out of your account; you still have $100. Imagine how pisse
by cwp 16y ago
No, they only loan out $90. But that is creating money. Where did that $90 come from? It didn't come out of your account; you still have $100. Imagine how pissed you'd be if you went to make a withdrawal and the bank said, "no, you can only have $10 right now, we lent the rest to somebody and they haven't paid it back yet."
- bigiain 16y agoThe $900 figure comes from the assumption that the $90 they lend out eventually lands in somebody else's account, and they then also lend out 90% of that $90, and then recurse that all the way down till there's nothing left to lend out again: perl -e'$s = 100; while($s > 0.1){$t = $t + $s * 0.9;$s = $s * 0.9;} print $t' 899.140495544283 (edited: I have no idea why HN dropped out the asterixes in that code...)
- deleted 16y ago[deleted]
- prodigal_erik 16y agoAsterisks without whitespace (or a leading indent) mean italics: http://news.ycombinator.com/formatdoc http://news.ycombinator.com/formatdoc