Look for the movie Zeitgeist (free on YouTube) to understand how banks are able to lend money even if they don’t have it.
In a nutshell, they are able to lend multiple times the money they hold from depositing clients.
So for example. If a bank has $100m (clients deposits) they may be allowed, by law, to lend 10 times that amount… Even if they don’t have the money anywhere, the central bank in their country will facilitate that money to the bank. There is much more to this mechanic but this is the core of how the banks work all around the world.
Look for the movie Zeitgeist (free on YouTube) to understand how banks are able to lend money even if they don’t have it.
In a nutshell, they are able to lend multiple times the money they hold from depositing clients.
So for example. If a bank has $100m (clients deposits) they may be allowed, by law, to lend 10 times that amount… Even if they don’t have the money anywhere, the central bank in their country will facilitate that money to the bank. There is much more to this mechanic but this is the core of how the banks work all around the world.
You’re describing “Fractional Reserve Banking” if anyone wants to look it up.
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