[Toddsterpatriot]

Todd, when subject to a 10% reserve policy banks must keep in reserve assets worth 10% of their outstanding loans.

If they loan more than the deposits they hold, how do they have any reserve, let alone 10%?

So, how were these loans "fully funded" if with one million dollars of assets the bank can make ten million dollars of loans?

Because they can't.

One million in deposits would only allow $900,000 in loans.

[Garth Tater]

"If they loan more than the deposits they hold, how do they have any reserve, let alone 10%? "

Ding Ding Ding! That's it right there. They create 90% of the loans value out of thin air!!! Do you get it now?

[Garth Tater]

Here Todd, a little research for into the money multiplier effect brought about by home mortgages.

What is the 'Multiplier Effect'

The multiplier effect is the expansion of a country's money supply that results from banks being able to lend. The size of the multiplier effect depends on the percentage of deposits that banks are required to hold as reserves. In other words, it is the money used to create more money and is calculated by dividing total bank deposits by the reserve requirement.

Please make note of the phrase "it is the money used to create more money." This is the money that is created "out of thin air."