Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: LLCF who wrote (11790)	12/12/2001 9:22:52 AM
From: Ilaine	Read Replies (2) of 74559

No, you're missing the point. If a bank loans only deposited money, it's not creating credit. The person who deposited the money can't get it back if it's loaned out, right? If she goes to the bank, and tries to take her money out, the bank can't give it to her. She could have given the bank permission to loan it out, but in that case, she is foregoing consumption, and can't ask for it back, e.g., via Certificate of Deposit (CD).

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