Introductory videos
The basics you need to know: Why is there so much debt? Why are house prices so high? How is money created? How can we fix money and banking?
Explained in plain English in short animations.
What is money?
We all use money, we all rely on money. But do we know how money works? Where does money come from?
Could these 3 simple changes to banking fix the economy?
More stable economy, with more jobs, less personal and government debt… This video explains how 3 simple changes to the way that money and banking works would make all this (and much more) possible.
Banking 101
Do you really want to understand how banks create money, and what limits their ability to do so? Then our 6-part video course ‘Banking 101′ is for you!
Part 1: Misconceptions Around Banking
Before we discover how banks really work, and how money is created, first to clear up any confusion, we need to see what’s wrong about the way that most people think banks work.
Proof & Further Reading:
Are Bank Deposits really just IOUs?
From the Bank of England’s 2014 Q1 Quarterly Bulletin:
“Economic commentators and academics often pay close attention to the amount of ‘broad money’ circulating in the economy. This can be thought of as the money that consumers have available for transactions, and comprises: currency (banknotes and coin) — an IOU from the central bank, mostly to consumers in the economy; and bank deposits — an IOU from commercial banks to consumers.”
Part 2: How Money is Really Created by Banks
In this video you can learn how commercial banks can create money through the accounting process they use when they make loans, how banks make payments between each other using specially created central bank money, if the Bank of England really can control how much money is in the economy …and more.
Part 3: How much money can banks create?
In this video we’ll see that the type of reserve ratio that’s discussed in the textbooks has never even existed in the UK. We’ll see that the liquidity ratios that did exist have been reduced and eventually abolished, and that even when they did exist, they only limited the speed that the money supply could increase, but put no limit on the total size that it could grow to.
We’ll learn that the Capital Adequacy Ratios and Basel accords are about preventing banks from going bust when loans go bad, rather than limiting their dangerous lending or limiting how much money they create through lending. And although the capital adequacy requirements can restrain lending after a banking crisis, it doesn’t do anything to restrain lending in a boom.
We’ll also see that there is no natural limit on how quickly the banks can create money.
Part 4: How money gets destroyed
Remember how new money is created when a bank makes a loan? Well, when someone repays the loan, the opposite process happens, and money is actually destroyed. It effectively disappears from the economy entirely. This video explains how.