Business idea

>he thinks they just gonna let him open a bank like that

what is fucking solvency

>>1667353
Not sure I follow you, OP. You have $1, so a fraction of that stays in your bank and you loan out, say, $0.80. A fraction of that stays in your friends bank and he loans you $0.64. So now you have $0.20 + $0.64, that's $0.84. Don't see how this scheme would work.

>>1667353
How could you loan $9 if you only have $1?

You do not have a fundamental grasp on how banking works.

>>1667376
>>1667453
>What is fractional reserve banking?

>>1667953
(You) clearly don't know what it is, yeah

>>1667987
Are you retarded.

>>1667353
I think the only thing stopping you is that when you go to register yourself as a bank they check if you're jewish, and if you're a Rothchild.

If not, then you're not allowed, peasant.

>>1667953
Fractional reserve banking is when a deposit is made, the bank is able to spend a fraction of your money, while at the same time you still have all your buying power. So if you deposited $1, the bank could loan out, say, $0.80, and you can still spend $1.

>>1668163
Fractional reserve banking means the bank can spend like 9x more than you deposit or some shit

>>1667953
TOPKEK m8.

b-bu-but Muh shill coins and stocks...

>>1668373
The bank RESERVES a FRACTION of your money. Even if the reserve requirement was zero, the bank can only lend 100% of your money, unless they leverage your money, but that's called leverage, not fractional reserve banking.

>>1668502
But can't you see the duplication occuring here?

IF i deposit $100...

And the bank uses that $100 for something...

And then turns around and lends that $100 again out to someone else..

They've literally pulled $100 out of their ass.

So following OP's example; They could lend the second set of $100 out to another bank.. then sell whatever they bought, and lend another set of $100 to the other bank.

Now the other bank has $200.

They can spend that $200, on again some other product, and again lend out the $200 to the first bank. (which now has $200 and can pay the customer which deposited $100)...

>>1668527
what is fucking solvency

>>1668527
>IF i deposit $100...
>And the bank uses that $100 for something...
>And then turns around and lends that $100 again out to someone else..

You can't lend out something you don't have.

>>1668539
>>I've never taken a macroeconomics course

>>1668502
no it isn't. fractional reserve banking means the bank can lend out more money than it has deposited. between 9 and 12 times worth depending on the country and bank. if you deposit $1, the bank can lend $9.

if it doesn't make sense, then welcome to your first redpill.

wew lad @ thread

>>1668531
One goes bankrupt, the other runs away with the virtual money;

You know; like Lehman brothers and goldman Sachs.

>>1669156

This pretty much

>tfw people on biz don't know that 97% of what we call 'Money' is actually credit.