Linkage: 10 November 2015
Fractional reserve lending means a bank need only hold approximately 10% of money in an account at any time. So if you deposit $100 into an account, the bank need only hold $10 in reserve and lend out $90. This doesn’t sound so bad, right? Except that’s not how they do it. The bank takes your $100 and puts it on their assets side of their ledger. They now have 10% of a $1000 reserve requirement. So now they can turn around and get your fellow debt slave to sign up for a used car loan of $1000. In this … Continue reading →
















