Seeing how haven ratios extent how most lending we can do.
Banking 9: More on Reserve Ratios (Bad sound)
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Tax and Banking Financial
Personal Tax and Financial Banking
Two thumbs up!!! Very educational…Thanks for posting. Surprise so few have seen this…no wonder education is dropping in this country.
the answer to idazeferina’s question is in video 6
What about high-powered money?
You don’t pay him with the money that the bank owes you.
what the bank merely does is transfer it owing you X amount (x being what you loaned) to the owner of the house.
checking accounts are basically an “I owe you”
maybe I should listen to the further lessons to find the answer, so excuse me for being impatient with the question:
When the bank gives a loan and accordingly issues Notes/Checks … don’t people who have an investment capital start spending it, and usually spend ALL of it for their expenses and not only 10%?
When bank gives me a mortgage, very next day I go and spend it all by paying the owner.
Where that money comes from when bank has only 10% of reserves?
evan with the “bad sound” the video was still briliont!
So if an asset becomes worth less than the loan given out and the depreciation is more than the amount remaining on the reserve ratio, you’re in trouble.
good job
You have done an excellent job in diffrentiating solvency from liquidity
that’s the problem in the current financial crisis – people thought banks were not liquid – however, the problem was much graver – most banks were not solvent
i really like this i learned alot
Where is this documented? I want to write something up on this but even though you are a good source I would like to reference the law or regulation itself. Who made this law or regulation? Congress? A committee? Does the Fed set the reserve ratio or someone else?
Still confused…but ill keep watching
Sal, just wondering if you write out your scripts before producing the vids?
where is 8?