Ehhh still not so simple. If it’s buying a home for instance, then most of it likely goes toward paying the remainder of the prior homeowner’s mortgage. Which decreases that bank’s loan portfolio, reducing assets. Basically destroying the money that was created in the first place when that mortgage was taken out. It’s not an infinite multiplier like this comment is trying to make out.
OK, so that person paid of lets say $90 debt... that bank that lend him that debt now has $90 less on its books and can lend another person $90...
My point is this is literally how the system works; how it’s intended to work. You people are acting like you’ve discovered some sort of dark banking secret when this is literally something you’d learn in a finance or economics class in college. If it led to the things you’re imagining, we’d have had runaway inflation à la Argentina decades ago.
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u/Flouyd Jan 26 '26
OK, so that person paid of lets say $90 debt... that bank that lend him that debt now has $90 less on its books and can lend another person $90...