Comment on Google to delay portion of staff bonusparentComments−jakehansen3yIs there an easy way to understand how the lack of a reserve requirement doesn't turn banks into infinite money machines?Edit: Perhaps banks are infinite money machines, but what consequences do banks face that prevent them from writing blank checks?−nullish_signal3yConsequences? Those are for Plebeians, since the Federal Reserve can just print more money.From 2020: "Inflation Baked In As U.S. Money Supply Explodes" https://www.forbes.com/sites/investor/2020/06/26/inflation-b..."A 33% increase in M1 (the most liquid portions of the money supply) in the last 12 months. A 105% increase (if you annualize it) in the last three months to May. You’d say that’s a 33% inflation rate baked in, right now."−totony3yThey have eliminated reserve requirement, but there still are capital requirements.
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Is there an easy way to understand how the lack of a reserve requirement doesn't turn banks into infinite money machines?
Edit: Perhaps banks are infinite money machines, but what consequences do banks face that prevent them from writing blank checks?
Consequences? Those are for Plebeians, since the Federal Reserve can just print more money.
From 2020: "Inflation Baked In As U.S. Money Supply Explodes" https://www.forbes.com/sites/investor/2020/06/26/inflation-b...
"A 33% increase in M1 (the most liquid portions of the money supply) in the last 12 months. A 105% increase (if you annualize it) in the last three months to May. You’d say that’s a 33% inflation rate baked in, right now."
They have eliminated reserve requirement, but there still are capital requirements.