A closer look
Commercial banks literally conjure new money out of thin air through a magical process called fractional reserve banking every time they approve a loan. Instead of just lending out the exact deposits they hold from other customers, regulations allow them to lend out a massive multiple of their actual cash reserves, effectively expanding the money supply with a few keystrokes on a computer. When you borrow money to buy a house, the bank does not hand you someone else's savings, they just invent the digital dollars and instantly charge you thirty years of compounded interest for the privilege. It is an absolutely flawless business model where financial institutions get wealthy by renting out imaginary money that only becomes real because you have to wake up and go to work every single day to pay it back
