i want to imagine uncollateralized load like this:
i'm a bank with 0 dollars in any asset, but 0 debt obligations. So my networth is 0 right now.
You come along to borrow off me $100. Now i have an asset of $100(the debt which you have to pay back + interest), but as soon as you spend your money, i also have a debt of $100.
Now isn't this a good way to make money from nothing?
If I have zero dollars, how did I have anything to loan you? I can put numbers on my ledger, but you won't be able to withdraw it - that's not fractional reserve, that's zero-reserve.
On the other hand, I've never objected to the notion that fractional reserve creates money - in fact, my comment above explicitly states it.
i'm a bank with 0 dollars in any asset, but 0 debt obligations. So my networth is 0 right now.
You come along to borrow off me $100. Now i have an asset of $100(the debt which you have to pay back + interest), but as soon as you spend your money, i also have a debt of $100.
Now isn't this a good way to make money from nothing?