Banks don’t just store your money—they multiply it. Deposit $1,000, banks keep ~10% and lend the rest. That loan gets redeposited, re-lent, and repeats—turning $1,000 into up to $10,000 via fractional reserve banking.
Banks don’t just store your money—they multiply it. Deposit $1,000, banks keep ~10% and lend the rest. That loan gets redeposited, re-lent, and repeats—turning $1,000 into up to $10,000 via fractional reserve banking.
It’s even worse than the video, since reserve requirements are currently 0%. Infinite money!
Relevant-Rhubarb-849 on
Yeah except there hasn’t been fractional reserve banking in the USA in many decades so that’s 100% false. However it’s also true that banks do expand the money supply and there are reserve deposits so there is an approximate net result that can sometimes look simmilar to a federal deposit reserve system.
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It’s even worse than the video, since reserve requirements are currently 0%. Infinite money!
Yeah except there hasn’t been fractional reserve banking in the USA in many decades so that’s 100% false. However it’s also true that banks do expand the money supply and there are reserve deposits so there is an approximate net result that can sometimes look simmilar to a federal deposit reserve system.