Starting an Airline

Re:Starting an Airline by beambot on Tuesday September 24, 2013 @05:16PM (#6440817)

I fail to understand your reasoning: 0.5e9 * 0.9^n < 0.5e9 < 1e9. In other words: No one is ever receiving $1B even if banks' balance sheets sum to more than $1B lent collectively. On par, each bank is holding a small part of the 0.5e9, and then the final individual is holding the rest.

[ Parent | on HN ]

Re:Starting an Airline by hrasyid on Tuesday September 24, 2013 @10:29PM (#6442282)

see http://en.wikipedia.org/wiki/Money_creation#Money_creation_t...

[ Parent | on HN ]

Re:Starting an Airline by sp332 on Tuesday September 24, 2013 @05:18PM (#6440833)

But it could be the same, singular bank that the money gets deposited in and loaned from, repeatedly.

[ Parent | on HN ]

Re:Starting an Airline by beambot on Tuesday September 24, 2013 @05:22PM (#6440859)

So? If you chain the loans, the bank might have the final balances: ($50M, -$450M) and ($45M, -$405M) and ($405M). The bank's net loan after settling internally is still $500M. Even if spread across banks, the sum of "real" money loaned out is still only $500M. If the loan at the end of the chain defaults, the loss is only $500M net.

[ Parent | on HN ]