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Fractional Reserve Banking requires a Business Cycle

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Published on Mar 3, 2009

- The cost of Fractional Reserve Banking.
- The need for a Business Cycle / Recession
- Credit growth drives the monetary growth.
- The multiplier effect of Fractional Reserve Banking.

Fractional-reserve banking is the banking practice in which banks keep only a fraction of their deposits in reserve (as cash and other highly liquid assets) and lend out the remainder, while maintaining the simultaneous obligation to redeem all deposits immediately upon demand.

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Videos on how banks work and how money is created, the workings of central banks and their effects on the money supply, inflation and/or deflation.
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Karl Denninger - The Market Ticker
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