How Private Banks Can Create Money, But Not Like the Fed Can
The Human Action Podcast
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Exploring the Mechanics of Money Creation in Banking
This chapter explores the process of money creation through fractional reserve banking by private banks like Citibank, contrasting it with the credit intermediation role of companies like Tesla. Through detailed examples, it emphasizes the economic implications of these practices and highlights differing views from economic theorists on the stability of the banking system.
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