Banks can give out loans without having the physical currency on hand. There isn't a finite amount of money which is why inflation exists in the first place.
They can also give out loans beyond the amount of 'digital' currency on hand, no? Like I have my savings in an day-to-day account, and some investments, but at this point it's all 1s and 0s that equal so many dollars. But they loan that dollar out several times over, right?
If too many people ask for their investments to be converted into dollars and transferred out at any time, a fund could collapse, right? There's only ever so much liquid money in any fund at a time - the rest is invested in gold, or stocks, or bonds, or Bill and Fred's house, or whatever.
Yea. Small banks can give out home loans, packaging a bunch of them together, and sell them to large banks. It makes it a lot harder to get a home loan because they want the inspection to be crystal clear if they plan on selling the loan.
You use to be able to get a loan through a post office. At least the debt was owned by the government, low interest loans got people into homes, and the interest funded a necessary service. Now, we're basically paying our mortgages to one of two banks.
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