|
|
|
|
|
|
by ClumsyPilot
846 days ago
|
|
|
> We (mostly) don't create money out of thin air. We borrow it This is the same thing - when you go to the bank to get a loan, the money is created out of thin air. It simply appears in a database. It is not the money someone has deposited in the bank. The only reason the bank has to keep reserves is for stability in case of bad loans. |
|
|
It is strictly not. All money is borrowed. This seems like free/unlimited printing when the interest rate is 0%. But when the interest rate rises, this has real consequences and you can't print your way out of a 5.5% interest rate.
This is why US politics got heated about finance as of late. If inflation doesn't come down, the US will have to "print" that money. Essentially rendering the Fed to the likes of Pakistan, Turkey and Argentina.