Here's a good old video on banking and money creation. Definitely worth seeing if you haven't already: https://youtu.be/jqvKjsIxT_8
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are being lent out
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I'll rewatch but vid used money multiplier story (banks lend part of each deposit, keeping some portion, then repeat)
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Claiming you need deposits (reserves) first, which are then lent in part has it backwards. Banks create loans ex nihilo.
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If you mean sovereign currency issuers create money from nothing, yes. Its a good thing, gold standard models = disaster
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But the point is the amount of money injected into the system has nothing to do with letting banks make loans.
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banks aren't waiting for money/depositr in order to lend. If there's demand and eligible borrowers, they lend. That's it
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individual banks are limited by deposits, though, with the reserve ratio. Right?
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Nope. Canada and other countries don't even have reserve requirements, yet make loans. In the US The CB has to supply...
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needed reserves at end of the day to match how many loans were already made (if deposits aren't there). Loan issuance...
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