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(lemmy.world)
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this post was submitted on 21 Aug 2023
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If you withdraw your $100 the loan doesn't disappear, it still exists. The Bank has $200 on it's balance sheet despite only $100 existing at the start. That money got created.
Except the bank has far more than $100 and the amount of money they have to loan goes down $100. So rhere's now $100 less on their balance sheet. Don't worry, your definitely right. I'll just pretend I didn't take multiple money and banking college courses so you can have this one. Clearly your made up bullshit win.
I'm going to start holding onto my friends money and making loans with most of it. Then I'll get to keep the magic money that appears. I bet it will just fly out of my asshole.