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> Your link is completely unrelated to what we're discussing. Do you mind explaining this? The linked article has an example very similar to yours, explaining
by have_faith 3y ago
> Your link is completely unrelated to what we're discussing.
Do you mind explaining this? The linked article has an example very similar to yours, explaining how bank loans create money. Does this not apply to your scenario? Or is it talking about a completely unrelated concept on the banking system? Or is it that you simply think the article is wrong.
I’m asking in an attempt to better my understanding of the subject. Please don’t turn this into an unnecessarily heated discussion.
- s1artibartfast 3y agoYou are mixing up loans and deposits, which are entirely different. Loans create money - nobody is disputing that. Deposits do not create or destroy money. Repaying a loan is not making a deposit. Total deposits in banks, for example in the title "US banks lost $472 in deposits" is not calculated as the total deposits minus loans outstanding. This sentence makes no sense and is incorrect: >Money (deposits) are created at the point that loans are made.
- have_faith 3y ago> This sentence makes no sense and is incorrect: >Money (deposits) are created at the point that loans are made. Maybe this article articulates better what I'm trying to say, as I think I was saying the same thing as it unless I've worded something badly. https://www.investopedia.com/articles/investing/022416/why-banks-dont-need-your-money-make-loans.asp https://www.investopedia.com/articles/investing/022416/why-b... Specifically the section: "How Banks Make Loans in the Real World" > Contrary to the story described above, loans actually create deposits