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You save money in a bank, they lend it out to someone, that someone is now in debt Debt = Savings
by zzbzq 2y ago
You save money in a bank, they lend it out to someone, that someone is now in debt
Debt = Savings
- ArnoVW 2y agoActually, banks can "create" money from nowhere. It's called fractional-reserve banking. When you deposit money into a bank, the bank is required to keep only a fraction of that deposit as reserves. The rest can be used for lending. The exact fraction is determined by the central bank's reserve requirements. And since 2020 it has been set to... zero percent. So essentially US banks can infinitely create money.
- CraigJPerry 2y ago>> in a bank, they lend it out to someone https://www.investopedia.com/articles/investing/022416/why-banks-dont-need-your-money-make-loans.asp#:~:text=How%20Do%20Banks%20Create%20Loans,is%20how%20they%20create%20credit https://www.investopedia.com/articles/investing/022416/why-b.... >> Debt = Savings That’s only true for public debt, excess spending (that which is not deleted through taxation) by the government shows up in savings