Quote Originally Posted by Tpoints View Post
yes, so at the end of the day, there may be close to $900 in circulation. But that's FAR less than somebody saying one $100 is deposited, they're allowed to lend out $900, because that means the next deposit will allow said bank to lend out $8100, where would that stop?
Doesn't work like that. If $100 is deposited, using the mathematical constant e, the most can be loaned out through constantly cycling the money is about $900. that is where is stops. Each time the principle, and the amount that can be loaned out, shrinks.