I’ve always wondered this. Sure, it goes “out into the economy”, but where are the first few transactions between institutions? And how much is it? Does it all end up in funding for megaprojects in the fiance industry or something?
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Other banks. Bank of America, Wells Fargo, Chase Bank, etc. Those banks then get to decide who to loan it out to. Small businesses and large corporations, home buyers and credit cards. Anywhere the banks think they can make a profit, they’ll loan out the money.
That’s America though. In other countries, they might skip that extra step and the central bank loans directly to whomever asks for it.
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