|
|
|
|
|
|
by hathathat
2950 days ago
|
|
|
> Banks get to create the principal that they loan out of thin air[1] I’m not sure how you get this from your reference - people deposit money at a bank, and the bank lends (gives!) some of that money out to (e.g.) students. The “creation” comes from both the depositor and the borrower thinking they have the money. |
|
|
People deposit money at a bank and the bank lends out 10 times as much!
Granted the "new money" is destroyed as the principle is paid back, but its new money out of thin air -- and the interest is real money!
Here is a more easy-to-read version[1]
[1] https://www.investopedia.com/articles/investing/022416/why-b...