Jun 9 2014, 12:45 PM
QUOTE(stren89 @ Jun 7 2014, 08:24 PM)
Can someone solve this riddle of banks and money?
If central bank issues $1million of new money for distribution to banks and the banks loan all the money to public with 10% interests.
If people pay up all the $1million loaned to them where is the extra 10% interest($100k) going to come from?
What happens if central bank continues to print more and more and people keep needing to loan more and more?
The more demand for money, the more money have to be printed and created out of thin air.
What happens?
in the end, be a street beggar..If central bank issues $1million of new money for distribution to banks and the banks loan all the money to public with 10% interests.
If people pay up all the $1million loaned to them where is the extra 10% interest($100k) going to come from?
What happens if central bank continues to print more and more and people keep needing to loan more and more?
The more demand for money, the more money have to be printed and created out of thin air.
What happens?
no need buy car,
no need buy house,
just show hand, then got money to eat liaw.
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