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RE: Bounty 10 Steem: Who creates the fiat money
Thank you. This has always been my impression. But then again i think, if it were this easy for a bank to create a loan, why cant I go there with 10k and ask for 100k loan. I could do this a few times and would then have billions. I'd buy all the bitcoins and leave the county.
Lol
You will be in debt i think for you to transfer to another country i think you need to show your scores or sokething like that
sure, but thats not the point. What I am trying to say is: if the bank could just create money out of thin air, there would be no risk to create a loan.
Why is lending for a bank risky?
I am no financial expert, but I would think at least part of the the reason banks would not give out loans solely based on being given 10% down would be because of the possible risk to their profit margin/ profitability as well as their reputation with investors if too many loans of that sort were defaulted on. They would need some level of proof of your ability to pay back the money in order to be worthwhile to the bank long-term.
I dont understand this reasoning. If the money is created out of thin air, the bank has no risk. And profit margin would be infinite even when the loan is defaulted on.
Only if they themselves have to borrow the money from the central bank do they carry a risk.