Comment: "If you didn’t have to meet a

(See in situ)

"If you didn’t have to meet a

"If you didn’t have to meet a reserve requirement then you could loan to infinity and beyond."

This was essentially the question I had just asked Bill. Even if banks just went and borrowed reserves from other banks, those other banks would be limited in what they could loan out because of their reserve requirements, no? So in the end, maybe one bank isn't limited by it's reserve requirement, but the entire system is limited by the total reserve requirement of the system as a whole.

Then if the fed is buying treasuries from the banks to boost their reserves, then the Fed is creating inflation by adding to the amount of capital that exists for the banks to lend.