I got into an economics debate a few days ago... my opponent asked, "are you a business grad or a mathematician?" I said, "no, but i've been watching a lot of khanacademy"
Full reserve banking & why it's good: If all deposits are 100% backed in hard currency by the time it's accessible to depositors & remain so as long as they're accessible, *on-net consumption* - equal to the amount deposited - *is deferred* over the course of the deposit's maturity (whether by the depositor themselves, _the bank, or other investment/lending entities_ [granted the bank lends for a longer term than the deposit/s maturity]). Given that one simple rule, lending intermediaries are free to lend as they wish. Society's not misled into believing they have access to money that's not there in full. There's no risk of bank runs, & thereby no need for a ‘lender of last resort’. There's no inflationary double-spending - thereby cantillon effects, distortions along the capital structure, & heightened societal time preferences. The only risk in banking is whether they lend to sound ventures or not. The only risk to depositors is to those who explicitly lend their money to the bank (time deposits). Deposits immediately accessible would be risk-free (on-demand deposits).
And this is why it's very Supreme important for a Children or Siblings to understand this method $ ( financial Literature & Economics, Federal Reserve Lending ) & also Health Insurance & Hygiene of the DOH ( Department of Health ) not just Basic Math & English , ( Basic English and Writing is a Must 1on1 ) but I feel those 5 things children and family generations must know down pact it would help us economy and Banking and Healthcaring... 💡 🧠 🧠
I think the problem that exists when people talk about the pros/cons of fractional reserve banking and full reserve baking, is that they are speaking through a paradigm in which government interference in financial markets has a created a situation where bank structures are not sufficiently emergent. I think a total market (read: free market) in banking and currency would solve much of this.
Full reserve banking's main motivation is a stable economy but it also would be a new source of revenue for the government and it's implementation would erase much of the government's debt.
🎯 Key Takeaways for quick navigation: 00:00 🏦 Fractional Reserve lending is a commonly used banking system in most market economies, but it's essential to recognize that it's not the only viable option. 01:54 Full Reserve banking, an alternative system, requires banks to keep all deposited reserves on demand, leading to more explicit lending arrangements. 04:45 In Full Reserve banking, banks wouldn't generate profits from demand deposits, possibly resulting in higher fees for customers. The lending process in this system doesn't create new money as in Fractional Reserve lending. 06:11 Full Reserve banking was the historical norm until the mid-14th century, and some serious economists proposed a return to it in 1939 during the Great Depression, although it was not implemented.
the people that didn't like the video are the people that take money and run. greedy. the other 400 and change will be the wisest wealthy people out there
Also in times of war , historically countries have abused the system by transfering large amounts of precious metal in order to prolong a war (Napoleon,Hitler) .My point is that a full reserve bank would be prone to such a event...
Question: In the full reserve banking system.... You said the that the central govt would have print more money since the money supply would be low. Well, isn't that the problem in the first place? The creation of money from out of thin air? Wouldn't banks just lobby the govt to print more fiat money so they could open more time deposit accounts, therefore increasing the money supply and inflating the countries currency!?
maybe in a perfect world everyone would understand that, and any president that printed too much money would be heavily scrutinized and possibly indicted. In a perfect world everyone would know that maintaining the value of their peoples currency is the prime function of the government administration. it is the greatest humanitarian effort. maybe if we were taught stuff like this all through out school instead of about racism and how different everyone is, we would all be in a better place.
Perhaps we could just deposit all money we don't want to be gambled with at the National Reserve Bank of our country (Bonds), take some to the local casino for "Investment" and stick the rest under the Matress?
He could be talking about the Georgia Proposal - i think thats what its called. Theres also a paper by i think the IMF in 2008, called the Georgia Proposal Revisited you could check out
Why is there a need for on-demand deposits at a commercial bank? Everything about your bank account besides cash is digital now. The supply of physical money is already controlled by central banks, so why can't they take over running ATMs and allow us to have on-demand deposits at the central bank? If you want to grow money, take it to a commercial bank that invests it by lending it out. Surely there are no downsides to this?
So... you are telling me a paid 10K for a 4 year college deegree in order to understand economy... and the knowlege was in a 30 minutes youtube series. Cool
That is an utter BS. If you do not have gold/commodity backed money, then it is AGAIN just a FIAT money. What makes money really valuable is its non-monetary value. Back in the day when people did not even use gold or silver, the "money" was barter, the goods and services they produced and consumed were basically money themselves, because they were having non-monetary value in the first place. Apart from giving it to someone else (what money does) they had additional value - e.g. food, you could exchange it with someone or you could eat it. You cannot have a stable money system without sound money - backed by intrinsic value - meaning it can be used to something else- not just as medium of exchange, store of value or unit of account. Understood? The limited amount of money (such as gold) is to remind you that there is limited amount of unique resources - there is limited amount of water, land, crude oil, gas, palladium, rhodium, aluminium, steel, iron. Maybe it will blow your mind what I am going to tell you, we still have only one Earth.
@@the_real_economics Yet, we have had fiat money for 50 years now and people still want and use money. Commodity-backed fiat is forced austerity on the most vulnerable. MMT allows us redistribute capital equitably and put it towards positive social projects.
@@Spudst3r Yes, we had for over 50 years and currency got devalued by over 80-90%, people cannot retire, people cannot afford housing due to inflation in the real estate prices, you have bubbles all over again and markets crashing all over again and again. Now you have equity prices beyond economic fundamentals (which is bubble). 50 years of disaster, 50 years of moral hazard, 50 years of taxpayers and savers paying for the losses of the big risk takers who privatize profits and socialize losses. The fiat money works best for the richest because they know how to take advantage of cantillon effect. MMT is nonsense that politicians perpetuate among stupid economically uneducated naive masses. MMT that does not work and results only in the destroyed currency that eventually nobody will want to use. The most equitable way to redistribute capital is by market - you want something, then go and do something productive and exchange it with somebody else on the bases of freedom! Dont try to steal it via taxes or inflation. Just in the 20th centuries you had over 50 hyperinflation periods you do not even know about and you dare to tell me this idiotic nonsense about MMT. Looks like you deserve to learn the lesson hard way. Is it better if the prices of goods and services decline or increase? Try to use some commons sense and try to keep telling this MMT nonsense to uneducated idiots, not to me.
I dont really support the guy in a lot of ideas but that is total crap. Its pure propaganda, from day 1 when he started being known I heard people saying he was racist and even wanted slavery and etc Hes not racist.
very disappointed. The way these short lessons on banking are set up, it seems like full-reserve banking is obviously better (despite what the commentator says). It makes it sound like fractional reserve banking is basically casino banking and pays little attention to what benefits it has. It doesn't bother me that you prefer full reserve banking but a more detail analysis would be required.
