Historical explanation of credit system, Capitalism and Modern Economics Subscribe for more informative videos with historical explanation. New videos every month.
6:21 right, the bank has only 1 million in its safe, but it actually has 3 million plus interests on its account. 8:18 I have to say it’s not blindly trust. Here is where an Actuary comes in.
By the logic that "the pie is not limited", we should print money and make everyone rich, but that's not quite how it works right? The reality is that by getting credit, you are impoverishing everyone else. Banks are more or less willing to lend money based on the interest set by the central bank, which is decided based on the inflation rate. People borrowing money are the cause of inflation, and since big businesses and projects are getting the big investments, you are getting poorer everyday. While housing and energy play across the inflation rates and government money, by getting paid the same you are getting poorer. There is no such thing as an unlimited pie, the resources are always finite (or they wouldn't make sense), but the illusion of infinite growth is sure appealing. The real magic here is making a system that can trick those who can't really grasp it into thinking that tomorrow will be a better day and, sometimes, that thought alone is enough to make it come true. We are intellectualising and sophisticating naivety. The economy and politics are deeply intertwined, Capitalism is not just an economic system, it is a form of government.
@@chewyjello1 I looked but could not find the series of lectures from where these 2 were picked. I suspect that they were from an online course he gave. Somebody somewhere must've saved them
This guy doesn't understand banking...banks don't need ANY money to make a loan. They only need a Federal Reserve account. A 10% reserve has long been obsolete and irrelevant. Bank of England, for instance doesn't even have the farce of a reserve amount required to make loans. Positive Money banking 101 on youtube has 6 brief videos on how banking works.
