http://news.planlab.us/2008/10/how-does-the-financial-crisis-affect-credit/ Thu, 07 Oct 2010 20:20:32 +0000 hourly 1 http://wordpress.org/?v= http://news.planlab.us/2008/10/how-does-the-financial-crisis-affect-credit/comment-page-1/#comment-62 Hugh Mann Tue, 29 Dec 2009 14:35:53 +0000 http://news.planlab.us/?p=159#comment-62 Thanks for the explanation. I'm confused, could you help me figure out what I'm not understanding? Your example appears to suggest that the bank can take a $1,000 deposit and turn it into $4,000 available for loans. Where is the other $4,000 coming from? I think I understand your explanation so long as each loan is redeposited with a bank. However, how does it work if the loan is used to buy a car or a house? I understand the bank has a security interest in the car or house, but where does it get the money to make the next loan? Thanks for any help you can give. :) Thanks for the explanation. I’m confused, could you help me figure out what I’m not understanding? Your example appears to suggest that the bank can take a $1,000 deposit and turn it into $4,000 available for loans. Where is the other $4,000 coming from? I think I understand your explanation so long as each loan is redeposited with a bank. However, how does it work if the loan is used to buy a car or a house? I understand the bank has a security interest in the car or house, but where does it get the money to make the next loan? Thanks for any help you can give.

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