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<p>[QUOTE=&quot;justafarmer, post: 1314102, member: 3926&quot;]This is not correct. A 10% reserve requirement allows a bank the ability to loan out up to 90% of its deposits but must maintain a minimum 10% reserve. If banks had the authority to loan at 9x multiplier based on reserves then banks could hold 100% of deposits in reserve and then loan out an amount equal to 9x their total deposits. Thus creating an infinite money supply. In fact a bank holding only 11% in reserve could create an infinite money supply. 11% x 9 equals 99% plus the 11% held in reserve equals 110%.[/QUOTE]</p><p><br /></p>

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