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#126 Dirk Ehnts: How Banks Create Money

The MMT Podcast with Patricia Pino & Christian Reilly

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Banks Can Loan Money Into Existence

Banks can loan money into existence, but it's offset the amount of debt that is created in the private sector simultaneously. Once people start to understand this pyramid where you've got central bank money at the top and then commercial bank money underneath, there's a more evolved version of the banks create all the money story. But still, commercial banks create most of what people call the money supplies, something like 92 to 95%. How do you answer that charge? Again, i would refer to this very clear example, afte us. And 20 21, the economy was was in shattes the creation of money by banks. It just depends on the demand for loans from the private sector.

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