Henry Ford: “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
Few understand this. When you deposit $100 cash in bank, it creates $900 in loans to other people.
Many countries have even less or under regulated reserve requirements. Global financial system is at 10x leverage but financial advisors advise against even 3x leverage to individuals
Deleveraging, defaults & bank runs are bigger risk than inflation. What we see in China is not unique
That’s why a Fed & CBs will do more barking & less biting.
Pivot!
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