Fractional reserve banking/ fiat money- do you realize that money doesn't actually exist?
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every time you put a dollar in the bank, the bank loans out 10 or more dollars, and charges interest. it's just numbers on a screen until they foreclose on your house...
Fractional reserve banking/ fiat money- do you realize that money doesn't actually exist?Yes , I've known that for 35 years. Sometimes I try to explain it to people but they just stare at me with a blank look. They should explain all of this to children in school but of course that would make people lose faith in the house of cards.
Innovator above, no the bank does not lend out a dollar for a dollar deposited. They "create" money, that is the whole point of the man's question.
Hopefuly for our money system most people will never understand it.
Fractional reserve banking/ fiat money- do you realize that money doesn't actually exist?AAAH, capitalism! WHAT TA COUNTRY
Fractional reserve banking/ fiat money- do you realize that money doesn't actually exist?Of course money does not exist...The amount of money being traded through stocks and bonds throughout the world is basically computer oriented. There is more money being traded then physical bills, but then again it does function correctly. If you put in a dollar, the bank loans out a dollar...not 10 or more...Because that would make no sense.
We deposit money in order to gain interest over a period of months, years, decades. When we do this, the bank loans out the money we deposited for a much higher interest rate for morgages, etc.
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