Again, close but no cigar. In actuallity, every penny created by fractional reserve based banking is un-created by the repayment of the loan. Every single penny.Harvester wrote:It shrinks!Nikki wrote:So close, but Harvester, what happens to the money supply when the loan is repaid?
Fortunately for the banksters, the quantity of new money created via lending is greater than the quantity repaid. This is necessary to keep the scam going. Otherwise we'd be staring at a debt crisis.
If you have any proof to the contrary -- that the quantity created is greater than the quantity repaid -- we'd love to see it. By the way, the interest payments on the loan do not enter nto the equation. Only the principal amount of the loan is involved in money creation.
But, of course you kenw that based on your studies of economics, right?