If you don’t like being asked the same question again and again, you don’t have to answer it. In fact, you don’t even have to be in this forum. If everyone was very good at research, this whole forum would be redundant. These forums are there to help fill gaps in interested people’s knowledge, some gaps more trivial than others.
So yeah, this will not be that last time by a long shot that this question will be asked in this very forum. If I hear this question again from someone, I will probably send him a link to the Murphy video. If nothing, I will at least have the courtesy of keeping quiet and will not bite the poor guys head off with cruel sarcastic remarks.
Having said that, the verified answers in this thread Fractional reserve banking had not answered my question. That is why I asked. After you complained, I looked for it in the archives and found an article http://mises.org/daily/3820. I also found this post too. It's not called fractional reserve because they loan out $9 of a $10 deposit - #10 by sthomper
MORE QUESTIONS
Anyway, with a reasonably solid agreement on part b, I have more questions. Again probably answered elsewhere, looks like an obvious question, but bear with me. If $100 becomes say $1000 and not say $90, then what exactly prevents two banks from loaning to each other until they are richer than sin?
Say Bank A initially has 10million. It loans 100million to Bank B, which loans 1b to Bank A which loans 1b back to bank B. Now, bank B has 100mil in reserve, 1b in excess reserve, Bank A has 110mil in reserve, 900mil in excess reserve, and both a ready to loan out more than 19 billion in funny money. Starting with just 10mil in one bank. Is this right correct?