this post was submitted on 23 Dec 2023
1039 points (91.6% liked)

Memes

44901 readers
3702 users here now

Rules:

  1. Be civil and nice.
  2. Try not to excessively repost, as a rule of thumb, wait at least 2 months to do it if you have to.

founded 5 years ago
MODERATORS
gary_host_laptop@lemmy.ml
sexy_peach@feddit.de
cyclohexane@lemmy.ml
cypherpunks@lemmy.ml
1039
Rent is Robbery (lemmy.ml)
submitted 8 months ago by Grayox@lemmy.ml to c/memes@lemmy.ml
150 comments fedilink hide all child comments
 
you are viewing a single comment's thread
view the rest of the comments
[–] thetreesaysbark@sh.itjust.works 5 points 8 months ago (3 children)

I'm pretty sure banks don't just make up money but I'd be interested in finding out why you think they do.

[–] TrickDacy@lemmy.world 1 points 8 months ago (1 children)
[–] thetreesaysbark@sh.itjust.works 2 points 8 months ago (2 children)

I think the answers to the question are generally isaying it isn't as simple as 'creatijg money out of nothing'. They may be creating money but that money is backed against assets which they do own.

because banks are government regulated and insured institutions, forced to back each loan with reserves, and regulated to have capital for each of those loans, they cannot really be said to make this private money out of nothing.

[–] TrickDacy@lemmy.world 1 points 8 months ago

The context you left out there said right before that "in my opinion". In any case though, before it was "backed" by a fraction of the loan. That doesn't mean it wasn't new money that did not yet exist. It just means if the bank folded there was something to go toward repaying those whom they owed. But in any case that fraction was reduced to zero in the US under trump. Something I learned in this thread. So really, now that backing doesn't exist any longer.

[–] TrickDacy@lemmy.world 0 points 8 months ago

How is money created? Some is created by the state, but usually in a financial emergency. For instance, the crash gave rise to quantitative easing – money pumped directly into the economy by the government. The vast majority of money (97%) comes into being when a commercial bank extends a loan.

https://www.forbes.com/sites/francescoppola/2017/10/31/how-bank-lending-really-creates-money-and-why-the-magic-money-tree-is-not-cost-free/?sh=18b9b3073073

[–] TrickDacy@lemmy.world 0 points 8 months ago (1 children)

I'm interested in how you're so confidently incorrect about a very basic fact about how capitalism works.

[–] thetreesaysbark@sh.itjust.works 1 points 8 months ago (2 children)

Hey, I simply said what I thought and expressed interest in what you thought. Not everyone here is trying to attack you.

[–] TrickDacy@lemmy.world 1 points 8 months ago* (last edited 8 months ago)

If I misread the tone of your message, my bad.

[–] TrickDacy@lemmy.world 0 points 8 months ago

How is money created? Some is created by the state, but usually in a financial emergency. For instance, the crash gave rise to quantitative easing – money pumped directly into the economy by the government. The vast majority of money (97%) comes into being when a commercial bank extends a loan.

https://www.forbes.com/sites/francescoppola/2017/10/31/how-bank-lending-really-creates-money-and-why-the-magic-money-tree-is-not-cost-free/?sh=18b9b3073073