Replying to Avatar Luke Dashjr

Not exactly.

In step 1, they set aside the whole $10k, declare that 10%, and loan out $90k they don't have.

So by the end, it's not $90k, but almost a million.
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techfeudalist 2y ago

My understanding is that the reserve requirement in 🇺🇸 is now 0%.

The banks can create as much money as they want and I suspect a lot ends up in the repo market earning ~5% — basically free money for the banks.

https://www.eidebailly.com/insights/articles/2020/4/federal-reserve-eliminates-reserve-requirements

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