w1891 - 5/21/2026 21:02 That’s not what fraction reserves lending does. It has to be paid back. So economic output has to match what is loaned out. Edit: For example if you borrow for 100 acres you have to provide enough economic output to pay it back. What it does do is allow less friction in the economy as economic output isn’t beholden to those with existing assets.
It allows for cheap interest rates as you don’t have to pay up to borrow existing money.
It’s market distorting and cheap interest adds to inflation.
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Fighting inflation
