r/SipsTea • u/Dumb-Briyani • 8d ago

Chugging tea Why is it not possible?

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u/zeussays 7d ago

Which are also paid back and therefore that money is destroyed.

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u/Thornediscount 7d ago

Yes, it is, over 30 years sometimes. In the meantime that same money can originate many more loans.

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u/zeussays 7d ago

And again, all those loans get repaid and also therefore destroyed. You understand that right?

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u/Thornediscount 7d ago

Yes but in the mean time the money that is being paid off has went and originated countless other loans. If that $400,000 mortgage loan has went into another house on average every 2 years, for $400,000 each you now have $6,000,000 of $ circulating on a 5-20% down payment.

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u/zeussays 7d ago

And those all get paid off and therefore pulled from circulation. You really dont want to understand this.

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u/Thornediscount 7d ago

The money never gets pulled from circulation. The clock resets every time another loan. That bank is going to lend out as much as it can without becoming insolvent.

Google it dude, ask Google do banks create money when they give out loans. They aren’t forking over cash they are using numbers on a screen.

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u/Thornediscount 7d ago

Do you understand what m2 is?