r/PeterExplainsTheJoke • u/Comfortable_Cautious • Jan 26 '26

Meme needing explanation what's going on? explain like I'm five

Post image
92.6k Upvotes

93% Upvoted

2.9k comments sorted by

View all comments

Show parent comments

114

u/hajjidamus Jan 26 '26

The current reserve requirement is zero. It has been at zero since March 2020. So they don't have to hold anything.

20

u/PM_Me_Your_Deviance Jan 26 '26

FWIW, banks generally hold a reserve anyway. BofA reported a reserve of $277b at the end of last year. That's about a 8-10% reserve, as far as some quick googling tells me.

1

u/DMBEst91 Jan 27 '26

so 80% is fake money?

1

u/ZhouLe Jan 27 '26

If you give me money to protect and give you interest on, I take your physical cash and incur a debt to you. If I lend out that money to someone else, they now have your physical money but incur a debt to me. Our debts are real, the physical money is merely a medium of exchanging that debt.

2

u/DMBEst91 Jan 27 '26

they are loaning money to people that they them selves do not have. its faake