Money 101: What Is Backing Bank Deposits (Follow The Accounting)
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When it comes to money creation, many feel that since it is "created out of thin air" there is nothing backing a deposit. After all, with fractual reserve banking, there is no need to keep the currency in the bank.
Here is some insight: this idea makes no sense since there was no currency to begin with.
In this video I discuss what is backing the deposits. Double entry accounting guarantees there is something there. What is it?
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