You people are great. Quality content with simple explanation. Keep it up guys.👍

I've always been the Reading writing comprehension and spelling girl I've been horrible math all my life! This was simple and I am in awe! Thank you for this I appreciate you brother

@thinkandthank1320

Жыл бұрын

😊

One form to look at it is that in creating interest you create value. The value of putting instant capability in the hands of someone. That requieres an amount of effort and investment. Therefore the amplifying factor. Now, is it a perfect market? No it's not. No person can really compare the rate of interest between banks beyond the rate itself. It requieres of the government to be regulated.

The money multiplier only exists in textbooks. In reality, only capital requirements limit credit creation and there is no fixed ratio between reserves and the quantity of credit that becomes deposits.

@contikie3724

Жыл бұрын

What determines capital requirements?

@simeon-1383

8 ай бұрын

​@@contikie3724Regulators, so the government indirectly.

@zarith87

5 ай бұрын

money multiplier does exists if you wanted to calculate money supply M0 M1 M2.. it is not literally that money existed out of thin air, its just clever magic accounting.. i usually explained money multiplier something like reversed insurance..in insurance all policy holders premium that had been collected were pooled into a huge account allows the insurance company to paid out insurance claim to their policy holders.. similar to money multiplier its just in reversed.. since all depositor were pooled into one big account allows individual depositor withdrew any amount deposited cash from their account despite being 90% of deposited money being loaned out to other party by banks.. Meaning when you withdraw 1000 dollars, you actually withdraw from a huge pooled account which is that of 10% of bank reserved ratio, in reality, most of the time everybody does not withdraw money at the same time, the 10% sort of acted like a buffer.. unless when everybody try to withdraw money at the same time then its callled a bank run.. so money does created out of thin air not literally, but by accounting magic..

You should do a video on the money multiplier!

In the case of a mortgage loan, I guess the $900 would go to the seller of the home rather than the borrowers checking account, right? Then the seller would deposit into a bank and then the cycle would continue on from there.

I have been waiting for long..thanks much

I appreciated this video so much! Ty

Thanks for this

Correct. However, people do not utilize the full proceeds of loans to open other checking accounts. Much of the value of the loans are employed such that the returns will generate not only enough money to repay the interest on the loans but also will generate profits.

*Basically we living in a system where they print debt notes paper out of thin air, and our debt forever increases. Meanwhile our purchasing power decreases every year. Great scheme.

Thank you.

This video helps me understand more about money :0

Will the Khan Academy website/app have a whole section dedicated to english?

Yes!!!!! Thank you my love :)

So what happens when the reserve requirement is $0. Like now..

@19cmgang

4 жыл бұрын

nothing,the ponzi expands further

@iliaadamanthark8336

3 жыл бұрын

Magic things happen

@nagarathnammat4988

3 жыл бұрын

Currency supply decreases in economy

@dzigerica666

3 жыл бұрын

Tbey need reserves regardles of minimum demanded from goverment/central bank. Otherwise it would be impossible to do elevtronic tramsavtions betwern banks

@tarunkumarsoni2587

2 жыл бұрын

Infinite rupees...

Got a big question Hasnt the fed now eliminated reserve requirements ? How will this effect the system? THANKS

It's been my understanding that if you deposit $1000, the bank can loan out not $900 (must keep 10% as reserve requirement), but actually 9 THOUSAND dollars. The $1000 you gave them is the 10% reserve requirement and the $9000 is loaned. That sounds nuts, but that's what I've been told

@G3nie

2 жыл бұрын

$9000 isn't always loaned but it potentially could be if desired through loans

@koboDresden

2 жыл бұрын

I think if you merge all A-B-C banks and A-B-C loaners, you get exactly that

@widehotep9257

2 жыл бұрын

Richard Werner proved that banks create new money when they issue loans with no prior need for deposits or reserves. The model being taught in this video is debunked nonsense.

@nthperson

2 жыл бұрын

@@widehotep9257 The video tells only part of a complex story. Banks do serve as intermediaries, but they also have been given the authority (subject to certain ratio controls) to make loans in amounts not associates with cash on hand.

@widehotep9257

2 жыл бұрын

@@nthperson Richard Werner proved banks do not serve as intermediaries. Nor do banks loan out excess reserves. The truth is that banks simply create new money whenever they lend. This video is teaching the debunked "fractional reserve" model. It doesn't exist.

Correction; The bank doesn't loan out your money, don't worry about that. The bank doesn't need anyone's money to issue loans. (that's a story for itself.) Your money is invested, in whatever that bank sees most profitable, ofc earning more than your interest. This is how they make their money for the most part.

i know i sound reallly stupid, but I don't really get it. how is new money getting generated becos if I put in $1000 dollars in a bank, how can a bank reservse 10% of my cash if they would have to eventually give me back my 1000??

@carlos_kay

3 жыл бұрын

Exactly! I've been through a KZread rabbit hole trying understand this but I don't. If the bank gives the $900 loan as cash, don't they have to cough up the money somehow? Hence no new money has been created? They have used the money deposited by the first guy.

@Potato_Peel_

3 жыл бұрын

You’re not stupid! It took me a while to understand this too. But I think it works like this: if you put $1000 in a bank, the bank is required to keep 10% of it (in an other comment I saw that this is now 0% as of March 26th 2020). But it still says you have 1000 in your bank account. The bank can lend the other $900 to someone else who will then have $900 on his account. From this, bank can lend $810 etc. So the bank now has $1000 from the first person (because it still says $1000 on his bank account) and $900 from the second person, because it still says 900 on his account and $810 from the third person. So the bank started with $1000 and ended up with 1000+900+810 = $2710 dollars. This means that they created $1710 dollars out of thin air... If they would have kept going with lending the $810 and then $729 if you calculate further and then $656.10 ... $590.49 ... $531.44. If you keep going and then adding them all together, I think you get 10.000 so they created $10.000 dollars (as stated in the video) from absolutely nothing... Edit: also keep in mind that this is still the simplified version, it’s probably much more complicated IRL.

@Acid31337

2 жыл бұрын

@@Potato_Peel_ if you will think about these so-called new money as deposits, this is actually not money, especially that can chase goods and services, because it cannot be used as legal tender, and nobody uses it in such way. Explanation is more simple than that - for your $1000 deposit, bank can loan up to $9000 instead of $900: it creates new money ex nihilo.

But how much remain after Inflation,NPA defaults,salaries of Bank,expenditure of loan receiving person,maturity gaps

Reserve Ratio Requirement, money multiplier, total change in the money supply

Is reserve requirement = central bank interest? Or the two are different tool?

God help me, need to submit assignment today

Seems like the US reserve requirement should be increased. This would make for less continued money creation/inflation and more selective/less risky lending, again reducing inflation as an affect. I think this and other things would lead to desired affects with less undesired impacts, that we see today and expect to see. Fed should also start selling its bonds it purchased rather than keep them and just slow future purchasing... They are taking the wrong actions causing the most pain for everyday people while the top understood, cashed out and are debuting at lower cost.. Why do we keep doing things that grow the gap?

In reality its not exactly like that and real multiplicator is slightly different.

Which is the app you are using as board...?

And if the banks are to apply a %10 interst rate on nay loans they give out, then that $1000 becomes $20,000. Please correct me if I'm wrong.

I have a question on this. This concept assumes that people who borrowed money will deposit all the money. But I wonder why people would do that when banks charge you in the form of interests. I would borrow the least amount to buy any equipment or assets and would not deposit in banks. Still, I understand that some corporates want to take advantage of low interest rate and they borrow the amount that they are gonna use in long term. This is all on paper, and I assume the most important entity in the economy, corporates, will behave as described in the clip and less important households would do the opposite, then this should be supplemented by what is the actual multiplier in the real world.

Isn’t this a similar problem with the failure of the subprime mortgage bonds because it ended up that the different banks liabilities were based on the outcome of other liabilities?

look up richard werner economics

My understanding is that the value of a country's currency is is entirely based on the ability (power) of that country's government to collect taxes (which are payable using said currency). But since countries are so deep in debt, we will never see significant cuts in taxes.

@ohmusicsweetmusic

Жыл бұрын

Nope that is an old, pre-digital/gold standard understanding of our money.

The increase in the money supply occurs when the feds buys debt bonds from the Treasury. Feds can also buy bonds from commercial banks which also increases the money supply. Interest rates raised by central and commercial banks are extra money that's not a part of the actual principal money supply. Which is why you'll always have more debt than actual currency. MMT claims fractional reserve and the money multiplier are myths.

OK, now i wanna build a bank :D

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@Guillermo535

Жыл бұрын

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@WilliamReynolds887

Жыл бұрын

I have also experienced her great work too, she is good I can assure you of that

@Marine40

Жыл бұрын

She is one of the best signal providers and I have made quite a lot of money without losing money even in a declining market.

So if people don’t take loans out there is a liquidity crunch?

In reality an economy doesn't reach its maximum loan limits. Many economies have no minimum reserve requirements and do just fine, it's interest rates that ultimately control the size of the money supply.

@trixn4285

8 ай бұрын

More accurately it's the amount of creditworthy customers applying for a loan at any given interest rate. The whole point of setting a target interest rate is to accommodate the money supply to whatever demand there is at a given interest rate target. If central banks set the money supply instead of the interest rate (because setting both is impossible) the interest rate would (and did) fluctuate all the time. The FED and the Bundesbank experimented with controlling the money supply and it was a disaster and therefore they abolished it. Reserve requirements don't change anything about the ability to make loans, they only make it slightly more expensive for the banks as they need to hold more liquidity than they would otherwise do. Canada doesn't have reserve requirements since 1992. The money multiplier theory is good for passing the undergraduate exam at most universities but it is both theoretically and empirically wrong.

If someone said it was a way to make money and all I had to do was give a $100 fee and the bank that they work with will send 3,000 to build their company by transactions would that be a smart move

0:01 printing money

The question now is what is the current reserve requirement and it is 0%

What happen to the treasury? Its loan without need payment?

So when people deposit currency they are creating inflation.

A question! Lets assume that a bank has zero asset and borrows 100$ from central bank, can it lend 900$ to the guy in the example? So, as in the example, the Bank A's asset is, now, 100+900, but liabilities is 100$, is it correct? So Bank A pays interests (at discount rate) to central bank on 100$ and receives interest paid on the loan of 900$ from the guy at the market interest rate r. Is it correct? (Also, r>discount rate).

@armendibishi7985

2 жыл бұрын

What happens is, no real money is created, new IOUs are created but no new money aded all the banks play with this 100$. Banks cant multiply money, only those IOUs that banks acept to each other.

@viktorpaulsen627

Жыл бұрын

With fractional reserve requirement of 0.1, the bank can lend 1000, not 900. The reason is that the fraction 0.1 of the loan 1000 is 100. Anyway, the fractional reserve requirement in not 0.1 anymore, but 0, so let's just disregard it in the following example. After lending $1000 to the customer, the bank has $1000 assets (the debit) and $1000 liabilities (the credit). A = 1000, L = 1000. (Note: this mentioned debit and credit is created from nothing by the bank by entering numbers into its computer system.) After completing the loan transaction, our bank receives interest on the asset and pays interest on the liability. (Assuming at this stage the customer still has the loan money in the account). If the customer requests a transfer of the credit money to an account in another bank, then to be able to transfer, our bank has to borrow 1000 of reserves from the Fed (or in an interbank system). After borrowing, our bank has 1000 more in assets (reserves) and 1000 more in liabilities. A = 2000 and L = 2000. It now has reserves that can be transferred (which is the 1000 of the A = 2000). The transfer removes the reserves (1000) and the credit (1000) which the customer had available on his account. When the customer's money has been transferred, A = 1000, L = 1000. Our bank now has the debt asset (1000) (the promise from the customer to pay back), which it receives interest on, and a liability (1000) to the bank that lent the reserves, which it pays interst on.

@armendibishi7985

Жыл бұрын

@@viktorpaulsen627 Thats correct, thats what im saying, the banks always need reserves if they need to convert to physical cash or when they need to make online payments to other banks, when they do any of those the efffect is the same they have less money. When banks give loans they only transfer money around they dont create new money the money multiplier actually does not multiply any money it only makes the exzisting money circulate faster, the only institution that can add new money in economy is the FED.

Fairtrade-win win

And I control less than 10% of the market so it’s not going to cause a crises the next day or anytime.

I didn't get that 1 over 0.1 part though.

Is time a factor?

The gov't eliminated the reserve requirement in 2020. So now that $1000 is infinite?

When all the depositors decided to withdraw all their money simultaneously. LOL.

who pays the interest money that printed from reserve bank?

Brb gonna start a bank.

@alexanderrr1825

2 жыл бұрын

Make sure you know how to credit an account. If you can write some numbers on the right side of a T account then you're good to go and know how to create money out of thin air.

endogenous money?

So in this case if the government puts itself in debt by $1000 and then the federal reserve prints $1000 into the economy it effectively turns into $10,000. The government then gets that $1000 back through taxes. (Just trying to keep things simple for my upcoming question) Where does the other $9000 dollars come from If the first depositor asks for that $1000 back?

@alonsovalencia3362

2 жыл бұрын

that 1000 is ina treasury bill so either he can sell it in the open market but he can't recall it 100% until maturity

But asset should be equal to liabilities+equity? If bank take 900 reserves for 2nd loan and create account for 2nd person then liabilities are 1900 and assets are 1000? What do i get wrong?

@viktorpaulsen627

Жыл бұрын

A=L+E is correct. You are missing the asset (900) which is the customers promise to pay back. When the bank receives the first $1000, the assets increase by $1000 and the liabilities increase by $1000. (The bank's equity is not changed.) When the bank takes the steps to lend out $900 to a customer, the assets increase by $900 (the debt is debited on the customers loan account, backed by the customers promise to pay back) and the liabilities increase by $900 (the money is credited on the customer's regular money account, ready to be withdrawn by the customer).

amazing explanation

@ultimathule1000

3 жыл бұрын

as amazing as totally wrong.

Did the video explain “How money is destroyed?”

sorry to say this, but first 54 seconds does not make any sense to me. I invested in 1000 worth government bond, central bank wants to inject money in economy, so central bank buys the government bond from me for 1000 ??? it does not makes sense to me. why would i lend 1000 to government and again sell it to central bank at 1000 . im in loss actually, same position as i was, before i lent money to govt. infact im at loss as i did not get value for time i lost between lending money to government and selling it to government at same price.

This video was really scary

0:32 and so what they do is they create 1000 federal reserve notes

Almost as if they are making money out of thin air. FTX

Wouldn't the $1000 be the 10%, and the first bank can loan out $10,000 instead of $900?

@fillemptytummy

3 жыл бұрын

Yes, they can hold on to the $1000 "cash" and "lend" someone $10,000 (not in cash) . Then if they wire it to another bank it isn't "paper" so isn't reserve?

@iirolenkkari9564

3 жыл бұрын

I think so too. $1000 as reserves and can loan out $10 000. Now if the person with the loaned out $10 000 pays for something and the receiver is within the same bank, the deposit just changes names. But if he pays for something and the receiver is with another bank, then reserves should be transferred also. Say he pays for $5000, then the bank would have to transfer $5000 of reserves as well. And since it only has $1000, they better borrow more.

The problem of all currencies is that they are national/ a new global reserve currency is unavoidable / to make all nations on equal terms/ a king transaction currency can keep all nations at peace "since wars exist on money" arms and the industrial military complex/ evolution on the economical realm have to accept a new king currency to be able to subsist/ the new global currency can restrain wars & exploitation, have master & slave distinguishes by values not a national currency / central individual banks remain however look over the global reserve currency/ as a name I recommend the BREN is as well a mythological name & merges with the numerous brand names of BANKS & organizations. The king currency keeps the central banks & private & public banks incheck/ the national currency remains same as euro & dollar however the dollar is no longer the global reserve currency. The king currency determines the value of the dollar as well the other world currencies in balance. Good-hearted an Economical Magna Carta/ it prevents nations investments on arms races and toxic industries. Since it is the the King currency that determines the value of each nations currency. FOOD is a lot cheaper that weapons, nations that buy weapons their currency diminished, while nations that buy food and health their currency increases in exchange value. HAVING a Magna Carta for the web, allows transparency from the kings currency & the nations of the planet.

so if the maximum amount of money created is $10,000 then the minimum amount created is $1900 right?

Fun stuff, huh?

Wait how did you get 0.9

Adding value to something that has no substance is generally called fraud.

FIrst minute was confusing. "federal reserves buys the bond from you and gives you money". How did you get $1k from cb if you just borrowed it to the goverment ? Anyways I still don't get it.

@blueenergyshowtime

Жыл бұрын

This is not the situation when your $1k is the ONLY money in the system. Money is created daily as the economy grows. It is hard to follow who owns what and who owes who in such a fiat system. Hence the banks can get away with their practice until everyone with money in the banks decides to withdraw all their money simultaneously. It is a system that needs trust, for example, the US dollar has the sovereign guarantee of the US government to tax its citizens and business. Also, the mighty military protects the interest of the United States domestically and overseas.

Europa: The Last Battle

Infinite Money Glitch

we know the liability the bank has to you but when you want to get your money back you cant. thats literally theft but well

sir why in bank 2 reserve 90 not 100

@lockbert99

3 жыл бұрын

Reserve requirement is 10% of money deposited. $900 was deposited in bank 2.

Wait a second. That doesnt mean new money is created. If after loaning 900 dollars, the person who deposits in Bank A wants to take all of his 1000 dollars. Surely bank couldnt do that. And why is 900 dollars loaned an asset when in fact there is no cash hence bank is unable to give the whole 1000 dollars to the person who initially deposited.

@kurtjohansson1265

4 жыл бұрын

It's a ponzie scheme. Kinda dicy isn't it?

@bradvincent2586

4 жыл бұрын

azim mustafa ahh you’re thinking too logically here. Just remember it’s the governments fault for giving the federal reserve a monopoly on money. Banks are just acting in their own interests and it’s at the expense of us, due to the governments’ terrible policies

@jamesmabry59

4 жыл бұрын

If you do what the bankers do,and get caught.You would be in jail before days end.

@Kyle_Schaff

4 жыл бұрын

Well, this video is assuming that this person depositing the money is the only client with the bank. In day-to-day operations, a bank ain’t gonna be having 10% of its value withdrawn. If it somehow is, banks are able to make short term loans with one another (or with the Fed, I believe) in order to preserve liquidity. When all that fails, you’ve discovered what usually turns into a bank run lol

@ultimathule1000

3 жыл бұрын

You are right and the Author is wrong. He mistakenly takes Receivables as money. The whole videa should be cancelled as a misleading information.

So what happens when everyone goes to the bank to withdraw cash?

@TheBreezus

Жыл бұрын

A SVB situation occurs...

A perfectly legal Ponzi Scheme.

Soo you are telling me that when you loan money that money get in the another bank?! No, no sir that money goes into credit for car, house, buisniess..

I haven't even finished elementary but I really enjoyed watching this video ☺

Since claims to money work like money, wouldn't claims to future money also work like money? Just as treasuries can be bought & sold, couldn't claims on time deposits work like money in the present? For example, I loan my money to the bank for a year. They're sound & so is the currency we operate under. They promise to give me my money back plus interest. They hand me a promissory note & say to bring it to them to get my money at the end of the year. Couldn't I trade that promissory note in the present with a merchant? If so, I no longer would be deferring consumption; ergo heightened time preference. And, at the same time, longer-term projects are being funded with my money I lent to the bank. This sounds like the business cycle would happen even under sound money & a 100% reserve system. Maybe I got something wrong. An explanation would be great.

@austinbyrd4164

Жыл бұрын

I think I figured out the answer to my own question. The only way those longer-term projects earn money to begin with (& thereby pay the interest & principal to the lender & their depositors) is if they succeed in their goals. If present consumption increases, that introduces systematic risk for those longer-term projects, & thereby their ability to pay back the lender's (which affects their ability to pay back depositors). People will have doubts that the debt obligations on time deposits will be fulfilled, & will no longer accept ious for time deposits as payment. The very act of accepting ious for time deposits as payment introduces risk for said time deposits, so why would anyone ever accept them? Still very confusing & I feel like I'm missing some piece of the puzzle here.

Fractional reserve banking does not really create money. Instead, it increases the availability of money as it is not left sitting in a vault. For example, as the fractional reserve requirement for a bank decreases from for example 10% to 5%, there would be more of the deposit to loan. However, if the fractional reserve requirement approached zero, according to this analysis the amount of money in the economy would approach infinity. Clearly that is not the case. If someone loans a dollar to a friend who loans it to someone else, and let us say this goes on a million times, we don't have an extra million dollars in the economy. It's just a bunch of people who owe someone the one dollar that exists. In the United States money is created by the Federal Reserve. They are the only ones who have the legal right to bring money into existance. Excessive creation of money, in excess of a compensatory increase in the goods and services of that society (the USA in this case) is the only cause of sustained long-term inflation. There is no rule that the government must increase the monetary supply. In fact, if they stopped doing this, there would be a deflationary pressure on the dollar. This means the cost of items would decrease and the money citizens saved in the bank would actually increase in purchasing power over time. This would certainly be a favorable change from the constant excessive money production which causes inflation over time. This is an important aspect of economics to understand. The fractional reserve system does not create money.

@willbellick

5 жыл бұрын

I just had a macro course and this process confused me. I was like: WHere are all of this extra money coming from? Glad you post your comment, still doing more research on the topic.

@NabeelFarrukh

5 жыл бұрын

Agreed. I was very confused because it looked as though money was being created from thin air. Thank you for your clarity! :)

@mrrooster4876

4 жыл бұрын

The problem is that the fractional reserve system creates a perpetual debt system where as debt can never officially be paid off

@tektak2400

4 жыл бұрын

@@mrrooster4876 That's not true though - mises.org/library/what-does-debt-based-money-imply-interest-payments

@nthperson

4 жыл бұрын

As a former banking officer, my inclination is to make the same argument. That said, there are no articles or papers anywhere on the internet that are written by bank CFOs or heads of corporate accounting. The evidence that banks create new money with each loan the bank makes comes from the internal paper issued in 2014 by the Bank of England. There is no doubt that in the U.S. the Fed is empowered to create new monetary units out of nothing. We should be outraged that our legislators have allowed this to exist. Giving individual banks a similar power essentially allows a bank to commit fraud.

Every explanation of fractional banking I have come across say with a reserve requirement of 10%, a $1,000 money created by Fed results in $10,000 creation by banks. This is wrong. Theoretically, fractional banking to infinity results in $1,000 in banks reserves and $9,000 in customer deposit accounts. As bank reserves are Fed Funds, the $1,000 is not included in M1. Thus a $1,000 money creation by the Fed results in increasing money supply by $9,000 if the reserve requirement is 10%.

@viktorpaulsen627

Жыл бұрын

If we run the scheme to infinity, the amount of reserves in all those banks would be $1000. (Agree?). Now, if we say the following: An amount equal to a fraction of the total amount loaned out has to be a reserve, and if we try with $10000 loaned out to see if the equation is satisfied, we try 10000 x 0.1 = 1000. Yes, the requirement is satisfied. Try with 11000 x 0.1 = 1100, no the requirement is not satisfied because 1100 is greater than 1000. Try with 9000, and you get 900, which means that of the 1000 there is still100 more available, and the scheme can continue, it has not converged yet. Btw, did you notice the following error in the video: (error in the sense that everyone expects that the maximal amount is going to be lent, and then he comes up with a lower number). The first loan in the video is 900. Problem is that 0.1 of 900 is not 100 but 90. First loan should have been 909.090909... Reserve requirement: 0.1 x 909.090909... = 90.9090909 add these together and get 1000. This satisfies the requirement that 0.1 of the loan is kept as reserve. And I guess that this error continues in the remaining steps. This might explain the wrong conclusion of 9000 instead of 10000.

Doesn’t make sense. Starts by saying YOU lend the government $1000 and YOU get a treasury bill. Then that treasury bill goes to the Federal reserve and YOU get $1000 paper money. So no money was created ? Why not just keep your original $1000 YOU used to buy the T-Bill.

@trixn4285

8 ай бұрын

The point is that on the aggregate level all funds to buy government bonds must have come from the central bank and/or prior government spending. The private sector can not lend to the government as bonds are paid with central bank reserves at the primary market (when they are auctioned by the treasury). And who creates reserves? Only the central bank. So in one form or the other banks that want to bid at the auction must first get hold of a positive reserve account balance. They can not issue reserves themselves. So in no way can that operation of selling bonds be called borrowing from the private sector. It's more like the central bank, as a public entity, lends reserves to the banks so they can buy government bonds (swapping the reserves for the bonds, so an asset swap) and then the government spends the reserves which leaves the banking sector with additional net financial assets. And if the banks are short of reserves as a result of government spending money into the economy the central bank will buy them to increase the money supply (to keep its interest rate target). FIAT currency is created by key strokes. It has always been that way and will always be that way.

Havent people gone to jail for doing this on a much smaller scale???? How is this legal??

That's the most inane description I've ever heard of the function of the U.S. Treasury issuing debt to satisfy the whims of a Congress gone out of control.

10Χ1000....

Who's gonna loan money from a bank to put it on a bank?

Confusing

Kinda sounds like a pyramid scheme

@ganjajoe420

Жыл бұрын

Absolutely is!

Audit the Federal Reserve! #auditTheFed

@bradvincent2586

4 жыл бұрын

DKong1026 end* their existence is already a violation of individual freedom

Why the banks are going bankrupt then I cant understand?

The interest is a ponzi scheme. The money to the interest isn't created when the loan and therefor the money is created. That makes it a ponzi scheme, need new loans all the time to finance the old. Solution is, remove interest and remove all current debt. It should not be allowed to earn money on money. Everything else is fail and if you don't agree then im sorry, you're not woke enough, when enlightened enough you'd see that interest and earning money on the money is egoistic and will not serve for the masses and we will be were we are again. With debtsaturation. We the people should give out our own money, interest free. Its to make our tradings easyer. Not so a few banksters can be titans and just have cashflow from nothing. If someone have money just siting and someone else needs money, they lend/borows interest free, the interest isnt an insurence for payback, interest is just a non-productive-load on the economy. If the one who had money needs them again, then he borrows from another one and then hes out. (Just example how it would work instead)

@AL-tk6vj

9 ай бұрын

What you are describing sounds like socialism

absolutely hate the orange dot cursor.

Isn’t this what Bernie madoff did? 🤔

When you deposit $1000 in a bank, you take it out of the system and when the bank lends out $900 of your money, they put it back into the system. Regular banks cannot create money. If they could, it would result in hyperinflation very quickly.

@Bucky1836

2 жыл бұрын

Nope you gotta comprehend "double book keeping" they shift across the ledgers

wrong f

In other words, the banks make good interest on $10,000 and pays me squat for interest on my $1000 deposit. So, next time I want some money from my account, I'm telling them either give me a loan at zero % interest and I keep my money there or I will be depleting their reserves and they will not make any multiple/convoluted interest on my money. That seems fair. In fact, it seems to be a good deal for the bank to loan me my own money at 0.0% so they can keep their reserve up. That fat cat banker would only lose, maximum, 10% of his waistline. Hmmmm..............

effin pyramid squeme

Not 100% true as no one loans money and pays interest rate to leave the money sitting in the account. If you loan money to grow your business buying equipment, that money wont be there anymore. And wont be in the account of the company that sold you the equipment either, since that company needs to refill their stock, and so on. This concept doesn't work in real life.

I can explain it better and in only two words... ponze scheme.

I'm 52 seconds in, and this video is pure stupidity. First, 'you' buy a Tresury bond for $1000. Then the Fed prints $1000 of Fed reserves notes an they pay it to you? So now they've bought the bond back from you. You had $1000 before you bought the bond, and now you have your $1000 back. No money was created. We're back where we started. The Fed has the bond, you have $1000.

I don't understand 😭

This is completely wrong. Money is not created this way in a modern economy.

@Bucky1836

2 жыл бұрын

Yea it is read Two Faces of Debt and Modern Money Mechanics by the Chigaco Fed

@stefanutoluiz

2 жыл бұрын

@@Bucky1836 already have a post grad in economics, tks