?? Work at Pickup Points � Flexible schedule

How Banks Create Money - Macro Topic 4.4

Jacob Clifford 1 views

Download

Download Video

Comments

This is a lie
Comment from : @itcouldbemedia

what is FED?
Comment from : @ananyapatel-b3m

I got a doubt, do we generally have to consider the initial round or not ?? as we are getting two different answers if we include or exclud it
Comment from : @ananyapatel-b3m

Smash
Comment from : @tuncsagkol

the only real money is capital in reserve
Comment from : @georgesamaras2922

This is not how banks currently work
Comment from : @MicahBanks-m4t

bro reminds me of johnny lawrence
Comment from : @tarakeshwar3243

really well explained, thank you so much sir !!
Comment from : @OscarVitte-j5g

best vid i edged to this
Comment from : @julianloke633

Amazing video thanks for your help
Comment from : @yuvaanjh7482

This is misinformation and therefore misleading
Comment from : @duduzerapw5612

The reason this guy gets along with saying this nonsense is because the listeners are dumb when you read and understand Merrill Jenkins you won't fall for this nonsense if you don't know the word Dollar in legal tender law it's an expression of the money a dollar it doesn't only become the money that's the dumbest thing I've ever heard because I've read the legal tender law the coinage Act of 1792 section 20 that States factually dollar is an expression of the money I'll bet my life on it
Comment from : @alexdmarcon

This is not how banks work
Comment from : @greogewestmann4913

I dont get the beginning of your first example you say that the 90 dollar that the borrower gets was created from nothing and just a few seconds before that you sad : the bank now can lend 90 dollar out The 90 dollar already existed, it only changed from owner
Comment from : @donttakeitpersonal8704

This is wrong Please dont learn people things that are wrong Banks dont lend out the deposits Thats not how it works Banks change the number in ur bank account, the dont lend out deposits, they just create money
Comment from : @Matiasatti

W gyatt
Comment from : @aktonkulous821

omg thank you, it was so confusing until i came across your video
Comment from : @sumsumiho

3:22 why we said it will hold 100 $ and how did we get the 4 ?
Comment from : @khadijahamid6905

Wrong!
Comment from : @pure_the0ry

Wrong Very wrong The narrator incorrectly says new money is being created when he means new loan assets, not actual money When all the debts are fully settled and paid off there is still only $100 in circulation brbrThe fractional reserve system only gives the appearance of more assets based on a sequence of loans from fractional reserve banking But if you follow the debits and credits it all equals out to the starting amount of currency actually in circulation brbrThis is true even if the fractional reserve is reduced to 0brbrIt’s like you saying if I loan you $100, and you loan that to a friend and he loans that to a friend that there is now $400 of money in circulation Nope there is still only $100 in currency in circulation No new money was created brbrNo new money is actually created in the video or the example abovebrbrThe fractional reserve system allows for the appearance of new money in the form of loaned assets But there is still the same amount of actual money in existencebrbrOnly the Fed actually creates new money out of thin air They primarily do this by printing money to buy govt bonds, agency bonds, and loaning money at the discount window And they do it a lot
Comment from : @FlyerBrothers

Why is it $500 instead of $400 if the FED bought the bond?
Comment from : @may-nk4nf

Please make for me a money I'm begging
Comment from : @LutherKundayo-hd1ki

Please make
Comment from : @LutherKundayo-hd1ki

Luther King is saying ken you make for me kundayo
Comment from : @LutherKundayo-hd1ki

Any suggestions on how I can pass my ap macro tests because no matter what I do I still end up failing
Comment from : @evelynnabil4064

this video is so informative wow
Comment from : @suzzlyy

Save us! You king!
Comment from : @jonathanmarshall1484

When "money supply" is counted in this manor what purpose does that metric serve? Money is being double counted What's the use? The money that we pretend is in the savings account is not in circulation until it is withdrawn so why count it as being in the supply?
Comment from : @sbennettyt

Banks do not create money out of thin air Show me some thin air and show me how you create money
Comment from : @alexdmarcon

When the Fed buys bonds, it creates reserves, not new money
Comment from : @MengerMania

And this multiplier effect explanation is outdated in regards to reserves
Comment from : @DistributistHound

I take a bit of an issue with Mr Clifford continually saying that new money is created "out of thin air" As a teacher, I understand that it's for engagement purposes, but I can't help but feel that being flippant about new money that is actually backed by our labor and productivity (banks require employment and credit scores to qualify for the 'new money'), can cause students to lose what little faith they have in our banking system and monetary policy
Comment from : @williammaguire1459

thank you, thank you, THANK YOU! I was literally so confused about this concept and I'm working on my final now so I have to describe how banks create money It literally made no sense to me, but you made it finally click Again, thank you so much!!
Comment from : @potatoes4lifersxd813

Wonderful as always
Comment from : @bushrashahid7790

I understand it creates out of thin air, but the initial $90banks can loan out, also needs to be backed up by some asset ( house, a car, etc) So, in reality, the bank actually has the $90, it just not in monetary form, but as an asset, that belongs to the bank until you pay that off
Comment from : @efss4237

I am going to give your references in my assignment, because you help me a lot thanks
Comment from : @Finlandinformation

This is a myth, the banking system does not operate the way Jacob describes it In reality, banks loans create deposits, and banks create money by entering numbers into a computer
Comment from : @landcruiserfan4206

There is no such thing as a money multiplier! It is a mislabeled term Its the worst way possible to represent what is occurring
Comment from : @spearotv587

Total scam!
Comment from : @chrisirish6941

I find myself at a crossroads, uncertain whether to liquidate my $250,000 stock portfolio I'm seeking advice on the best strategy to capitalize on this current bear market
Comment from : @AlbertGReene-p8w

Thank you so much for the clear explanation however it seems like fractional reserve banking system give so much power to the banks it's almost scary and something that should be changed/modified Coz look at the reasoning behind the recessions, esp the 2008 Just saying 🤷🏽‍♀️
Comment from : @Djshhdhshshakjsjjsjsksks

Thank you for the enlightenmentbr-Amar A Mbr(Indian)
Comment from : @amarmajeed1733

thank you, now I won't fail my macro course :)
Comment from : @ДиасБахтиаров-ю5д

econ 101
Comment from : @mattyounger9907

what about a cash withdrawal or 100k
Comment from : @mattyounger9907

monitizing the debt run on the bank
Comment from : @mattyounger9907

Sounds like a ponzi scheme
Comment from : @keehoon99x

How do u teach me more than my college professor
Comment from : @sweetleys

How many people are here after the Silicon Valley Bank crash and chuckled when Mr Clifford mentioned "bank runs"?
Comment from : @SweetbJames

Thank you for this video, it was really helpful!
Comment from : @DmitriiBragari

Thank you so much for this explanation
Comment from : @hatrang5143

Thank you fro the way you take the time to discuss with us a better way of learning Economics It seems so much easier to learn from
Comment from : @FantasiaBouchez

And thats how banks create money from nothing For example, in my country(Serbia), CBS(Central Bank of Serbia) set a required rate of reserves at 5, but in 2 years, required rate of reserves is 0 So, in two years, banks can lend all its deposits deposited before 2 yrs
Comment from : @bokakotorska4416

Using HELOCS as checking accounts by depositing your income
Comment from : @debieisaacs7986

Amazing 👏 you made this so easy to understand! Thank you🙂
Comment from : @NoodlzB

this is some seriously stupid stuff if you watched this and didn't realize he's full of crap, you are not bright
Comment from : @Chris-kb7vo

Is the MM no longer a thing since the world left a fixed exchange rate in 1971 and instead uses a floating flare? No gold back IOU money This is antiquated
Comment from : @jaymills1720

So money is bullshit
Comment from : @defiantdomingo8278

But what about when people repay their loans?
Comment from : @drake1896

Thank you so much sir 😊
Comment from : @ivyjoyfmagbanua24

this is so damn helpful omfg thank you so much
Comment from : @nellyxie2344

thankyou!!!!
Comment from : @laibamasood4317

This guy talks so matter-of-factly about slavery La dee dah banks create money and you have to work to pay it back
Comment from : @normanplombe2889

In 2020 they changed the reserve requirement to 0 so does that mean they can create latterly infinite amount of money?
Comment from : @luisfabricioserranotorres2573

not me just taking lots of economic classes to do an entire economic system in minecraft
Comment from : @quandaviousdingletheiii9951

thank you so much, I was having such a hard time understanding what actually happens and why money is created in the first place 4 days of question marks only for you to clarify my confusion in 4 minutes haha
Comment from : @a_green_cat

Does this new money exist permanently? Or does the government ever decrease the money supply on a certain schedule or equation?
Comment from : @_STNML

Quick tip for you guys: If you are having trouble doing the money multiplier, try doing this instead Use the same formula (1/reserve ratio) and with the number you get multiply it with the amount of money deposited And for the last part subtract the initial money that was deposited from the new amount of money you found: For example $200 was deposited and the reserve ratio is 20 percent The money multiplier is 1/2 which is 5 Now multiply 5 by 200 you get $1000 Subtract the initial 200 from the new 1000 you found which is 800 and that would be the increase in the money supply Hope this helps
Comment from : @lc_plays9535

U r the best!!!!
Comment from : @nosharabrown4709

Jacob, that is wrong RPD (Reserve Policy Doctrine) was proven finally wrong in 1983Banks need 0 deposits to give out loans They create accounting operations on the liabilities and assets sides simultaneously, thus creating totally new money (increasing usually m2) without touching deposits It's sad you are misleading people here
Comment from : @thePot_

love you bro
Comment from : @neneRijan

More like GDP out of thin air If I give my friend 1k and he buys a phone from me for 500 the I didn’t make the 500 out of thin air but the GDP did increase by 500
Comment from : @fish_supremacy

Reality vs academic: the reserve ratio really is not that important Banks lend money as long as they deem it profitable and as long as there are credit worthy borrowers and demands They’ll take care of the reserve by borrowing funds if they have to
Comment from : @afarro

Buy Bitcoin
Comment from : @tylerdiebs2412

Everyone talks about government printing money, but they never mention how banks do the same thing
Comment from : @kylorenkardashian79

First comment in a couple years so this may not get answered Im an eco tchr in TX According to the FED the current reserve requirement is 0 Mathematically, this means that there is no money multiplier since you can't divide by 0 Does this mean that the MM is undefined or approaching infinity? I'm the tchr, I'm supposed to have the answers I am the worst tchr in America Thank you for recognizing that
Comment from : @williammaguire1459

This lesson is nonsense Richard Werner empirically debunked the money multiplier effect by proving banks create all money when they issue loans with no need for deposits or reserves
Comment from : @widehotep9257

Dude looks like an off brand Mark Cuban
Comment from : @roadbeerspod

My stupid textbook makes simple things so damn complicated
Comment from : @AlienAndHisCat

So banks create inflation That means that non-borrowers subsidize borrowers
Comment from : @natechomnicorp

Been watching and learning from ur videos since last year thanks u r the best teacher 👍👍
Comment from : @joelsundresan727

David boreanaz That’s who he looks like
Comment from : @moniquehurley1470

Reserve requirements were reduced to ZERO in 2020
Comment from : @thomasacreman6007

lol am not even good at math
Comment from : @ivtepanhasak

Banks don't lend deposits or reserves Banks create money when they lend Deposits are used to balance the books He's describing the fractional reserve theory of banking, which is complete bunk The credit creation theory of banking is accurate
Comment from : @karfar8029