Most people think that banks lend solely from their base of deposits. Some also know that with fractional reserve banking, they can loan out many times more than they actually have in reserves. But very few people - with the exception of those in the banking industry and financial experts - know where credit really comes from. Germany's central bank - the Deutsche Bundesbank (German for German Federal Bank) - has admitted in writing that banks create credit out of thin air.
March 20, 2010
Washington's Blog: German Central Bank Admits that Credit is Created Out of Thin Air
Washington's Blog: German Central Bank Admits that Credit is Created Out of Thin Air
