: Can the Fractional Reserve System be used by the Common Man Say... I ask my neighbor for and promise him . I then turn around and invest my 0 [post multiplier] into a govt bond. Then I give him his and keep

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The you borrow won't just magically turn into 0.

What a bank does is to "borrow" by taking a deposit of .

It promises that the depositor (your neighbour in this case) can have the money back whenever they want. It also lends out most of that to someone else, e.g. as a mortgage. That money then finds its way back to the bank as another deposit from someone else, and the bank lends it out again, and so on.

The fractional reserve requirement is the amount that the bank doesn't lend out this way. So if it was 10%, then only of the original deposit will be loaned out. When it comes back, only .10 will go out, and so on. That adds up to 0 - another way of looking at it is that the is 10% of the eventual 0.

Now the bank is on the hook for 0 of deposits that can be demanded at will, but only has to actually cover them. So it has to hope that everyone doesn't ask for them at once.

You could in theory do this for yourself, but in practice it's unlikely that anyone would believe your promise to return the deposits on demand, and there would likely also be legal restrictions.