Quote: LeighGionaire "snip'"
If money is simply created by banks, as you seem to think, completely out of nothing, how is a run on a bank possible?
If tomorrow i go to any bank in the UK with a £1000 deposit, and i wish to buy a £100k house, and ask for a 200% mortgage (i want to buy a nice car and do up the house etc), they would say no. Why?
In your version of reality it costs them nothing to give me the mortgage, the money is created out of thin air. From their point of view absolute worst case scenario: the housing market crashes and the house becomes worthless, and i default on the very first repayment. They've still gained a free house and got paid £1000 for nothing. If in your world the worst case scenario for the bank is that they get £1000 for nothing, why in the real world wont they give me the mortgage?