Brett on Nostr: Question though james ! How exactly does it work? 1) $100 dollars deposited at ...
Question though james (npub1cj9…0efa) !
How exactly does it work?
1) $100 dollars deposited at institution A, A keeps $10 (with a 10% reserve ratio), and lends out $90, the $90 gets deposited at B, who keeps $9 and lends out $81, and so on and so forth until the $900 is created, or
2) can A hold the $100 and create $900 worth of loans straight away?
And if it’s 2) wouldn’t institution B then be able to create $9,000 of loans straight away from the $900!?!?
How exactly does it work?
1) $100 dollars deposited at institution A, A keeps $10 (with a 10% reserve ratio), and lends out $90, the $90 gets deposited at B, who keeps $9 and lends out $81, and so on and so forth until the $900 is created, or
2) can A hold the $100 and create $900 worth of loans straight away?
And if it’s 2) wouldn’t institution B then be able to create $9,000 of loans straight away from the $900!?!?