WiM047 - The Saylor Series | Episode 11 | The Failures of Fiat
The "What is Money?" Show
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Leverage Is a Tool That Amplifies the Boom and Bus Business Cycle
With a ten % reserve ratio, banks are then allowed to take 90 dollars of the 100 dollars, 100 dollar liability. So they've effectively increased the money supply by 90 dollars. And this just injects a lot of leverage into the system. We're amplifying the boom and bus business cycle,. were we're causing a perceptual disturbance in the economic system that actually causes a the accumulation of hidden risk and blow s.
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