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When you use your credit card, the bank fronts your spending out of their cash reserves - no new money is created.
by count 6y ago
When you use your credit card, the bank fronts your spending out of their cash reserves - no new money is created.
- gumby 6y agoThough they were obtained at the discount window, as they are not circulating they have no impact on the functional money supply until you use them...at which point you still have that $20. But I am engaging in some hair splitting, I admit.