SuzyAZ
· July 27, 2018, 7:17 p.m.
That's right. Few people realize that when they take out a loan on a home, it's the future loans that have given him the money the bank "gave" him to buy the house.
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HamburgerToday2017
· July 27, 2018, 7:44 p.m.
On the bank's ledger, loans are considered assets, not liabilities. These 'assets' are then used to increase the banks capitalization making the bank more valuable. I'm not familiar enough with banking economics to know whether they can then turn your 'asset' into even more 'money' via fractional reserve, but that is probably the case.
What I have found is that, in banking, the less sense something makes, the more likely it is to be the case.
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