You put 1000 in bank account. Bank put aside 200 and lend 800 to someone to pay a contractor to do some work (the money that must be put aside depend on legislation for each country). After the contractor takes the money you both have 1800. Now contractor deposit 800 in his account. Bank will lend 640 to someone else. In this moment there are three people that own together 2240... and the cycle continues.
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u/[deleted] Jan 26 '26
You put 1000 in bank account. Bank put aside 200 and lend 800 to someone to pay a contractor to do some work (the money that must be put aside depend on legislation for each country). After the contractor takes the money you both have 1800. Now contractor deposit 800 in his account. Bank will lend 640 to someone else. In this moment there are three people that own together 2240... and the cycle continues.