I would like to understand how dollars are created from banks
As I understand it;
You deposit $10k into a DDA account, like a checking or savings and the bank is able to loan out $100k in credit card “credit” to customers.
Where does the $90k come from? Can the bank just open up new lines of credit but then when the customer spends $90k, where does the bank get $90k to pay whomever the customer spent the money with?
Does the fed send it to the bank ? Is that bank allowed to make the dollars appear? I’m confused
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Fwiw I finished the book and a must read for big macro investor imho .
Nooooooooooo!* The lesson one should always take is that one should not be a macro investor. It is too damn hard and even the [strike]best[/strike] luckiest get the investments wrong a lot.
The problem is that when dealing with macro you don't have enough data to determine whether a model is true or false or somewhere in between. That leaves you with "what makes logical sense" and a few anecdotes** as your guide, and markets are as logical as my ex-wife.
*Voice was one of someone who just saw someone slipping off a cliff, not yelling
**Anecdata
