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If you deposit $10,000 into a bank 🏦

Here’s what happens…

The bank set asides a 10% and loans out the rest of your money.

How it works, say another person comes in and asks for a car loan of $9,000.

At this moment the banks loans out $9,000 from your original deposit, it isn’t there anymore.

The borrower then pays the person selling the car and they deposit the money into another bank which is the part of the same central banking system.

This $9,000 is treated as a new deposit.

The process continues…

The money gets redeposited and re-loaned until the initial deposit of $10,000 becomes $100,000.

The banking system just created $90,000 by loaning out your money.

Banking system is a fraud. Learn #Bitcoin

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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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.