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To: Rurudyne
A nation that abuses credit has a government that abuses credit … who would have thunk it?

Wise words.

People have been taught in economic textbooks about the "fractional reserve" system, and how banks lend out a portion of deposits as loans, etc.

This is all completely wrong. It's not just me saying it - the central banks admits it...going so far as to state that the economic textbooks were wrong in their efforts to simplify things.

People don't even know that the Fed set the "reserve ratio" to ZERO in 2020. Banks don't lend deposits - each new bank loan creates brand new money in the money supply, once a signature is placed on the promissory note.

Same goes with credit cards. Each credit card purchase increases our nation's money supply by the amount of the purchase.

This means that the consumer is contributing directly to the price inflation that they're vociferously complaining about.

Money does get destroyed when the principle on any debt is paid - by the amount of the payment.

85 posted on 01/17/2022 9:08:37 AM PST by politicket
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To: politicket

An economy of fictions, entities in place of Persons.


112 posted on 01/17/2022 10:21:30 AM PST by Rurudyne (Standup Philosopher)
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