GM
There are no reserve requirements for banks. They can issue as much debt as they want from nothing at all. This is normal and could never have massive, systemic negative consequences so don't thi...
Bank: “We’re going to loan you $500k so you can buy a house.”
Person: “Okay thanks, do you actually have the $500k?”
Bank: “No of course not.”
Person: “Then how can you loan it to me…?”
Bank: “Don’t ask questions.”
Person: “Okay thanks, do you actually have the $500k?”
Bank: “No of course not.”
Person: “Then how can you loan it to me…?”
Bank: “Don’t ask questions.”
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