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The Bank can now loan out 810 bucks to little Sarah who wants to fix up her bathroom. Now the Bank really only has $190 on deposit but tells everyone they have $1900.

The bank has $1900 in deposits, loaned out $1710 and has $190 in reserves.

(Pretty sweet gig if you can get it.)

I know. Lending out less than your deposits, crazy!

We can keep going, but it's obvious 1st Bank has @$$loads more 'deposits' than it really has.

More deposits than loans or reserves.

Fine. You understand the situation clearly but choose to play the game anyway.

I get it.

The loans are based on nothing, which is why we are now in this crisis.

When the banks can leverage by 10X the 'deposits' and loans at full value and then get us to TARP them out, that is where the evil of Fractional Reserve Banking comes fully into play.

My great-grandchildren (at least) will be obligated to pay for this greed-game of multiplied 'money' that has now started to collapse, and the perpetrators of the scheme will be living off the labor stolen from us in the form of our plundered 401Ks while we pay back Bernake's loans.

Truly a sweet gig if one can get it.