this post was submitted on 23 Dec 2023
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[–] [email protected] 1 points 1 year ago (4 children)

They dream up money? How does that work? I'd like to do that.

[–] [email protected] 6 points 1 year ago

🌈Fractional reserve banking

[–] [email protected] 6 points 1 year ago (1 children)

You should read about how banks work. Most of their "assets" don't actually exist, they're counting borrowed money as still being theirs.

[–] [email protected] 4 points 1 year ago

Simply put, when enough people deposit money into their accounts, banks will simply take the money and lend it to someone else. It is not "their" money, but crunch enough numbers and do enough predictions and you might make it out.

That's why "run on the bank" is such a feared things - if everyone starts withdrawing cash or sending it to a different bank, the bank can't really do that because they don't have the money.

[–] [email protected] 3 points 1 year ago

Yes, it's the largest way money is created in modern democracies