The economics of all-you-can-eat buffets

Re:The economics of all-you-can-eat buffets by superkuh on Sunday January 26, 2020 @05:03PM (#22155098)

There are less than 5000 commercial banks in the united states and it is very rare a new one is approved. They've been consolidating and the total number declining for decades. Banking isn't a monopoly but it is a very limited, exclusive, club for those with lots of assets.

After all, if you're a bank you can create new money supply out of thin air by lending out money you don't have (fractional reserve). A money printing machine is a very valuable business. Every other service a bank provides is just icing on top of this.

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Re:The economics of all-you-can-eat buffets by lonelappde on Sunday January 26, 2020 @09:11PM (#22156349)

Fractional reserve is lending out money people give the bank. it's not free money for the bank; the credit is balanced by a debt. You can do the same thing if you convince people to leave stuff at your house and then you rent it out.

Heck, every lessee on Airbnb is doing this.

As is everyone who has a mortgage and an investment account.

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Re:The economics of all-you-can-eat buffets by chii on Monday January 27, 2020 @08:03AM (#22158858)

A bank can lend out more than the total deposits they have under fractional reserve banking. This is literally creating new money.

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Re:The economics of all-you-can-eat buffets by superkuh on Monday January 27, 2020 @11:09AM (#22160599)

Yep. The majority of the M0 money supply is created through fractional reserve banking as debt.

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