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im aware that the whole "they take a fraction of your deposits and lend it to other people" is a myth. banks lend money created out of thin air, and that's primarily how money creation occurs.

if so, however, what's happening to my deposits? i read a yahoo article that talked about deposits simply being used to fulfil reserve requirements  but the reserve requirements are currently ZERO

so... what's going on with the money that i've deposited at the bank????

if i have any misconceptions do clarify! thanks!

37 Answers

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Fractional reserve. They only have to keep 1/10th of the total balance of all accounts on hand. The rest they lend or invest in steady yield apr like life insurance and whatnot.
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This is why smaller banks need a notice ahead of time for large balance withdraws in cash because they gotta come up with it. Ie remove it from investments so they can give it back to you.
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Reserve percent is not zero, its 15-20%
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Like you want to trace the physical dollars right? Any amounts beyond an operating reserve at each bank location gets sent to the federal reserve.
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Rrp


Edit: i could be wrong. Im sure I am.
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There isn't really a connection between the cash that is deposited in the bank and the balances people see on their account statements anymore. The description "they take a fraction of your deposits and lend it to other people" is only correct metaphorically. Technically it's inaccurate because loans don't use cash. Maybe there was a time when it was accurate.
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Research the debt monetary system
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They invest it, make cash, and pay you a penny or even charge you for doing so.
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One for reserve, one for investments. Bitcoin doesn't do that as it doesn't use banks. Thats why I've been using up all my USDTs to buy more and more lol
by
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Banks need to hold 10% in reserves then use 90% of your money on loans or investment and give you a 0.0005% yield on the money u saved

If everyone goes to the bank and wants to with all their money that’s called a bank run. The bank will collapse.

Then the fed needs to print to save the bank

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