SpokenTruth said:
There is a limit but it's more a function of their reserves than the FRB. As that loan is repaid, that can get loaned back out again. The FRB limit is just the reserve ratio requirement which is the amount of deposits they must have on hand at all times. But as a loan is repaid, that means the deposits grow with new money and the cycle continues. The FRB limit is really a mininum rather than a maximum. I did have my numbers off a decimal in my previous example. Even at a 10% reserve ratio, $1,000 is turned into $9,774.72 after 36 cycles. That's $8,774.72 is new money for every $1,000 deposited. And they can keep doing that indefinitely so long as they retain 10% in reserve. Banks below $15.2 million in deposits do not require a reserve ratio at all. Between $15.2 and $110.2 million require a 3% reserve while any bank with greater must hold a 10% reserve. |
I think we have different views of "printing money" in mine. I'm more thinking with the pledges from some UK politicians of £500b in investment on infrastructure pledges etc. Rather than the existing system already in place.