Track A · FoundationsNode A3
How banks create money
A modern commercial bank does not lend out savers' deposits. It writes a loan and a matching deposit into existence in the same keystroke. Most of the money in the economy was made this way. Drive the books yourself, then decide what you think.
Layer 1 · Pocket
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What is this?
When a commercial bank issues a loan, it does not lend out someone else's savings. It writes a number into two ledgers at once — and that act creates new money.
Why should I care?
Most of the money in the modern economy is bank-created, not government-printed. Whether it expands or contracts is what mortgage rates, asset prices, and your job market are tracking — even when no headline mentions it.
A loan creates a deposit · live
Loop · 0%No reserves leave the building.