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Someone asking to borrow money makes it get printed
#353951 - 05/06/16 05:02 AM
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Re: Someone asking to borrow money makes it get printed
[Re: Smitdogg]
#353953 - 05/06/16 06:37 AM
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Fractional reserve lending is a fundamental part of the modern financial system. It isn't so much that it makes it get printed. It's more a matter of wishing it into existence. Essentially, the bank lends you money that doesn't exist, but you have to pay them back with money that does exist. It's supposed to come into existence from primary production, e.g. mining useful stuff, growing crops, manufacturing value-add, etc.
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Re: Someone asking to borrow money makes it get printed
[Re: Vas Crabb]
#353972 - 05/06/16 07:25 PM
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Re: Someone asking to borrow money makes it get printed
[Re: Smitdogg]
#353977 - 05/06/16 09:57 PM
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> https://www.imf.org/external/pubs/ft/fandd/2016/03/pdf/kumhof.pdf
>
> Uhhhhmmmmm
Pretty cool huh?
Now to really bake your noodle they count it in many different ways.
https://en.wikipedia.org/wiki/Money_supply
I recently found this video and it explains it very nicely what is going on in non economic jargon. It leaves out huge swaths of what is going on but is nice because it keeps it simple. He talks about the creation of money. Most people call it credit. https://www.youtube.com/watch?v=PHe0bXAIuk0
Also if you have ever used a credit card you created money. The bank made up money to pay for your purchase with a promise from you to pay them. When you 'pay it off' that fake money disappears and is replaced with real cash. Its kinda subtle and weird.
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