Agree it’s horrible.

There’s 10 people on an island (that’s the whole economy), 1 central banker who makes the shells (currency) and 3 private bankers.

There’s 50 shells in existence but they have fractional reserve with 0% reserve requirements, and the central shell creator is the creator of last resort.

Each banker loans out 50 shells for housing. Now there’s 200 shells in the economy but only 50 actual shells. If the three customers are hard workers and high earners it’s not *possible* for them to earn enough to pay back their loans, cuz there’s not enough physical shells.

It’s easy to think that in the real world the problem is solved because it’s just numbers on a screen, but the only one that can add zeros in the end is the fed. If the bank could do it, then there’d never be an insolvent bank.