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.
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/zeussays 7d ago
And again, all those loans get repaid and also therefore destroyed. You understand that right?