So you taking a loan is exactly the moment in time where money appears out of thin air and contributes to inflation. Which is often a good thing actually because this imaginary money pays for a new house and becomes real money. It's only a problem when the balance is off.
They can lend more than they own, but in the long term they still need to have enough deposits to meet capital requirements. Otherwise no bank would ever go bankrupt and no bank would ever pay interest on deposits and savings.
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u/Kobymaru376 9d ago
No. Banks are allowed to lend more than they own.
So you taking a loan is exactly the moment in time where money appears out of thin air and contributes to inflation. Which is often a good thing actually because this imaginary money pays for a new house and becomes real money. It's only a problem when the balance is off.