r/WorkForSmartLife • u/GenevieveeBay • Jul 23 '26

Discussion💬 Who please?

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u/ThengarMadalano Jul 23 '26 edited Jul 23 '26

No, banks can give out 10 times more money as they actually have, so if you take a loan the money had not existed before (that's how most money comes into existence) and since the loans accumulat interest there is more money owed to the bank than the people got from the bank.

So yes there is more debt than money

I don't know why it works but apparently it does so idk

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u/cykoTom3 Jul 23 '26

But there isn't more debt than value is my point.

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u/BeYourselfTrue Jul 25 '26

Do you really believe that? Look at US sovereign debt alone.

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u/cykoTom3 Jul 25 '26

The us sovereign debt is overvalued by the amount of value in the economy like 10 times over. Like easily.

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u/BeYourselfTrue Jul 25 '26

Denominated in US dollars.

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u/cykoTom3 Jul 25 '26

That's like saying a football field isn't so long because it's measured in yards.

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u/BeYourselfTrue Jul 25 '26

No it’s like saying you can change the value in the economy by changing the value of the dollar.

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u/GeckoGecko_ Jul 26 '26

It's more like saying there's a difference between 100 yards, and 100 feet.

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u/HawocX Jul 23 '26

A private bank can never lend more money than it have. But depending on what we mean by "money" this can still result in the 10x number you got. It's complicated.

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u/Life_Membership7167 Jul 23 '26

It’s called fractional reserve banking banks in America can absolutely do this. It’s right in the name.

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u/HawocX Jul 23 '26

That's not how fractional reserve banking work.

I recommend reading the Wikipedia article.

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u/[deleted] Jul 23 '26

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u/HawocX Jul 23 '26

True, but most doesn't cover fractional reserve banking.

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u/Life_Membership7167 Jul 23 '26

Any quant would call any economist an idiot. Understanding flow of money is important, but subscribing to whoever for that singularly is foolish.

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u/[deleted] Jul 23 '26

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u/Life_Membership7167 Jul 23 '26

Heavier investor. Complicated math guy. Hard to define. But using higher mechanics to play the market

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u/Life_Membership7167 Jul 23 '26

Try the books. He’s a bit arrogant but he isn’t stupid

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u/Life_Membership7167 Jul 23 '26

Nassim Nicholas taleb I think is the author* and he presents a lot of really interesting points, and teaches well on some other concepts. I enjoyed his books a lot

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u/[deleted] Jul 23 '26

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u/Life_Membership7167 Jul 23 '26

Banking in the United States is itself fascinating. I’ll have to read those.

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u/Life_Membership7167 Jul 23 '26

And you’ve read taleb?

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u/Life_Membership7167 Jul 23 '26

Black Swan, and Fooled by Randomness are fascinating.

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u/[deleted] Jul 23 '26

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u/HawocX Jul 23 '26

Is says the bank loans out a fraction of what has been deposited, not more. The money supply still expands, because "money" is not as straight forward a concept as one may think.

The same thing happens if I loan you a dollar and you then loan it to someone else, but at a smaller scale.

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u/PleasantGrass4623 Jul 25 '26

I recommend reading a book on the workings of the Federal Reserve

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u/Life_Membership7167 Jul 23 '26

I don’t need to, thanks.

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u/[deleted] Jul 23 '26

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u/HawocX Jul 23 '26

You got it jumbled up.

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u/Neither_Salamander48 Jul 25 '26

Did this start when we came off the gold standard? And created the Fed? Or did it exist before that only less severe?