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[00:01:06] I mean, you started this at the height of the financial crisis because you could see that regular banks weren't lending to people who needed it.
[00:01:17] But what happened is my customers were coming to me and they couldn't get funding.
[00:01:21] So I thought, well, I'll lend them the money. They paid me back. I thought this banking malarkey is not that difficult.
[00:01:26] This is the Debunking Economics Podcast with Steve Keen and Phil Dobby.
[00:01:33] Well, maybe the banking malarkey is a bit difficult in that most people don't really understand how banks really work, in particular how they lend out money.
[00:01:42] So confusing though it is, let's try and make sense out of what's taught in schools and universities and what happens in the real world.
[00:01:49] For example, what happens with David Fishwick's Bank of Dave in Burnley, who we just heard from.
[00:01:54] And that's this week on the Debunking Economics Podcast.
[00:02:03] So how do banks lend out money?
[00:02:06] There's, I think, an increasing acceptance now that when banks lend out money, it is new money.
[00:02:11] It adds to the money supply.
[00:02:13] Most people seem to agree with that, although that is still not the way it's taught in schools today.
[00:02:18] So how are they teaching it?
[00:02:19] How have they got it wrong?
[00:02:20] And how does it really work?
[00:02:23] So Steve, maybe we should start with how it's taught in schools very briefly.
[00:02:28] Let me give my understanding of how.
[00:02:32] But say I was setting up a bank, Dobby Bank, and it cost me a million pounds.
[00:02:39] I had that million pounds.
[00:02:40] So that's a million in equity I've got.
[00:02:42] And I managed to convince people to give me 10 million pounds worth of their savings.
[00:02:48] So I've got liabilities of that 10 million pounds, and I've got, as well as the, you know, that million in equity.
[00:02:57] And then on the asset side, well, I've got the asset of the bank itself, which is worth a million.
[00:03:02] And then I've got the 10 million.
[00:03:03] You know, it's very straightforward.
[00:03:05] The question is how much of that 10 million that they've given me is classified as reserves,
[00:03:11] and how much of it is just cash that happens to exist?
[00:03:14] Well, yeah, let's go back a bit, because your starting point was correct,
[00:03:18] in that if you want to establish a bank, you have to acquire sufficient funds,
[00:03:25] which you can then commit to the bank as you're backing.
[00:03:32] Particularly in the UK and America, there's a huge approval process.
[00:03:35] And a couple of my friends actually went through it.
[00:03:37] But I've got to spend money.
[00:03:38] I've got to spend money anyway.
[00:03:41] Yeah, you've got to do this.
[00:03:42] There's a lot of costs.
[00:03:43] So let's see, you get your million in equity.
[00:03:46] That goes in as an asset, which would normally be in the form of bonds, okay?
[00:03:53] But it will be, you'll literally raise the money from associates, you know,
[00:03:58] share offers, whatever, to have that initial amount of money.
[00:04:03] I just happen to have a million.
[00:04:04] I just, for this bank, I just happen to have a million.
[00:04:06] Okay.
[00:04:07] You've got a million worth.
[00:04:08] So you'll buy a million dollars worth of bonds, government bonds,
[00:04:11] and you'll have a million dollars worth of equity as a result of that.
[00:04:15] Assets with no liabilities.
[00:04:17] That's where you start.
[00:04:18] So when you get the liabilities, you've got to...
[00:04:20] Well, I was going to spend my million, actually,
[00:04:24] in building the infrastructure, employing people,
[00:04:27] all the stuff I needed to get the business going.
[00:04:29] Then you run your equity down.
[00:04:31] Because that's the...
[00:04:33] Let's just talk entirely electronically,
[00:04:35] because if you're going to have an investing in creating a bank,
[00:04:39] and then you say you've got to, you know, build it and hire people to do...
[00:04:42] To do that, you are using your equity.
[00:04:45] Okay.
[00:04:45] So if you used your whole milking dollars in equity building a building,
[00:04:48] you wouldn't be approved as a bank.
[00:04:50] You'd have zero financial equity.
[00:04:52] And what you've got to be able to show is starting with financial equity,
[00:04:55] not...
[00:04:56] This is...
[00:04:56] Let's get one important distinction out of the way straight away.
[00:04:59] So there are two major...
[00:05:01] From an economic point of view,
[00:05:02] I don't care what accountants think on this particular one.
[00:05:04] From an economic point of view,
[00:05:05] there are two fundamental classes of assets.
[00:05:09] There are financial assets,
[00:05:11] and they are a claim you have on someone else, a monetary claim.
[00:05:15] And there are financial liabilities,
[00:05:18] the claim somebody else has on you.
[00:05:19] Then there are non-financial assets.
[00:05:21] Those are things which are an asset to the person who owns them,
[00:05:24] or an entity, but not a liability to anybody.
[00:05:27] So your house, if you own your house,
[00:05:28] even if you have a mortgage on it,
[00:05:30] the house itself is your non-financial equity asset,
[00:05:36] which is also your non-financial equity.
[00:05:38] And it's not...
[00:05:39] Right.
[00:05:39] So Dobby Bank, then, is a...
[00:05:43] You know, the actual...
[00:05:44] The brand, it quickly establishes,
[00:05:46] and the systems and all the work that's gone into that,
[00:05:50] which might have cost money.
[00:05:51] I've spent money getting all of that stuff done.
[00:05:53] That's a non-fin...
[00:05:54] That's ultimately a non-financial asset.
[00:05:56] But ultimately, to be operated as a bank,
[00:05:58] you've also got to have financial asset,
[00:06:00] and that means you have to have money that you can commit to.
[00:06:04] And if you were sort of brain dead as a bank,
[00:06:08] you would simply put that in reserves.
[00:06:10] But why put it in reserves when you can buy government bonds?
[00:06:14] Okay.
[00:06:14] So the government will leave your returns.
[00:06:15] So that border...
[00:06:16] Okay.
[00:06:17] So that question of reserves versus...
[00:06:20] At the initial stage, yeah.
[00:06:22] And at the initial stage.
[00:06:24] And so the same thing.
[00:06:25] And reserves, you're using that as a term for cash, in effect.
[00:06:30] No.
[00:06:31] It's not...
[00:06:31] No.
[00:06:32] No.
[00:06:33] In the 19th century, I'm out of.
[00:06:35] But the fundamental thing about being a bank
[00:06:38] means you have to have an account at the central bank.
[00:06:41] Yeah.
[00:06:41] So there's several types.
[00:06:45] You know, cash in a vault is also part of your reserves,
[00:06:48] but it's a specific type of reserve.
[00:06:51] But what you will have as well is a bank account
[00:06:53] at the central bank.
[00:06:55] Now, let's go back pre-Grope...
[00:06:57] Okay.
[00:06:58] So it's a bank account that's sitting in the central bank.
[00:07:01] It's not hard cash.
[00:07:03] It's not hard cash.
[00:07:03] But it's got a pound figure associated with it.
[00:07:04] Part of it will be because you'll have ATMs
[00:07:06] and you'll want to have cash on hand
[00:07:08] in case there's a run on your bank.
[00:07:10] Yeah, yeah.
[00:07:11] Well, okay.
[00:07:11] And that's the important point
[00:07:13] about why you have so much in reserve.
[00:07:14] But okay.
[00:07:15] So that 10 million that I've managed to convince people
[00:07:18] very quickly that they should be putting money
[00:07:19] into my bank account.
[00:07:20] So I've got 10 million in savings.
[00:07:23] People putting an deposit.
[00:07:24] Okay.
[00:07:24] Yeah, yeah.
[00:07:25] So they are at 10 million of assets
[00:07:28] and it's a liability to me.
[00:07:29] I've got to pay that 10 million back if they want it.
[00:07:31] Some people don't get that.
[00:07:32] I had this abusive exchange
[00:07:34] with somebody on Twitter or YouTube.
[00:07:37] I was trying to explain that.
[00:07:39] And he said, oh no, you've got something wrong.
[00:07:40] You're a fraud.
[00:07:41] You want to pursue that had to be like a gold
[00:07:44] backing the whole thing.
[00:07:45] And this partly is where the confusion about gold comes from
[00:07:49] because gold bugs,
[00:07:50] people who believe that money should be gold
[00:07:52] or believe in hard money,
[00:07:54] they think the asset is the hard,
[00:07:56] what has to be the asset they think
[00:07:58] is the hard asset, the non-financial asset.
[00:08:01] They can't get their heads around the fact
[00:08:02] that an asset can be a claim on somebody else.
[00:08:05] But that's what goes on.
[00:08:06] So yeah, the deposits become,
[00:08:10] the people who put money in the bank by depositing,
[00:08:13] you get their cash
[00:08:14] because what they're actually putting in is physical cash.
[00:08:17] So it starts off cash on your asset side.
[00:08:19] But the liability you have is you've said,
[00:08:21] anytime you want it, demand deposit, you get it back.
[00:08:23] You say you want your money, I'll give it to you.
[00:08:25] Otherwise, if you don't do it,
[00:08:27] you're not functioning as a bank
[00:08:28] and you actually probably be shut down.
[00:08:30] So that's why a bank run is a terrifying prospect
[00:08:34] for a bank if it actually happens.
[00:08:36] They are absolutely committed to hand that cash out.
[00:08:39] That's why a deposit is a liability for a bank.
[00:08:42] So of that 10 million,
[00:08:44] I don't have to hang on to all of that as reserves though.
[00:08:50] Yeah, I don't have to hang on to all of that as cash, do I?
[00:08:54] No.
[00:08:54] So I don't have to put all of that into my reserve bank account.
[00:08:57] And I could say, and these days there's not really a stipulation set,
[00:09:01] but I could say, well, I feel happy
[00:09:03] so long as 10% of that 10 million, a million.
[00:09:07] Is it in cash?
[00:09:09] Yeah.
[00:09:10] Oh, yeah, exactly.
[00:09:11] Or is it in my reserve account at the reserve bank?
[00:09:15] No.
[00:09:17] Right.
[00:09:18] Is it all?
[00:09:19] You get 100,000 in cash.
[00:09:21] Now, you want to hang on to it.
[00:09:22] Sorry, you get a million in cash deposited.
[00:09:25] And you want to...
[00:09:25] We have 10 million.
[00:09:26] Oh, sorry.
[00:09:27] Okay, go ahead.
[00:09:27] Yeah, let's stick with the plan.
[00:09:29] It's 10 million.
[00:09:30] My bank is far more successful than you thought, obviously.
[00:09:32] I mean, I was surprised myself.
[00:09:35] But yeah, I've got 10 million to plan.
[00:09:36] Okay, so 10 million comes in cash.
[00:09:39] You then hang on to 1 million of that in your vault.
[00:09:42] That's your vault cash.
[00:09:43] And then you tender the other 9 million to the central bank.
[00:09:47] And you're doing what your customer did with you.
[00:09:51] So the customer walks in with a very large wheelbarrow full of cash.
[00:09:55] And then dumps it on your teller.
[00:09:57] And teller then puts 1 million of that into the vault.
[00:10:02] But then, you know, goes down the street with a wheelbarrow up to the central bank and says,
[00:10:06] dumps this into the central bank and says, you know, to the central bank's teller,
[00:10:09] please put 9 million in my reserve account.
[00:10:12] So then that cash now goes into the hands of the central bank, that 9 million.
[00:10:17] And in return, they show that the private bank's bank account at the central bank also has 9 million against it.
[00:10:25] So that cash now becomes the reserve bank's asset.
[00:10:30] But the reserve account becomes its liability, which is also your asset.
[00:10:35] Which is at odds to what most people would argue.
[00:10:38] So most people would say out of that 10 million, most of that, out of that 10 million, 1 million I'd keep in reserve.
[00:10:45] I would deposit into my bank account at the central bank.
[00:10:49] The 9 million, I can do with what I want.
[00:10:52] Pardon me, pardon me.
[00:10:54] I had a big night last night.
[00:10:55] Okay, you're right.
[00:10:57] You hang on to, well, this is the textbook story we're going through.
[00:11:02] So you've got your...
[00:11:05] I put my million in reserves.
[00:11:06] I've got the 9 million, which I lend out to other people.
[00:11:09] Lend out to other people.
[00:11:11] Now, let's get the wheelbarrows rolling here because that means that the idea of what a bank alone is,
[00:11:15] and this is why what they're taught in a textbook is a complete fallacy,
[00:11:20] is that the only way the textbook model of money creation works is if indeed loans go out in cash.
[00:11:27] So you get 10 million, you know, somebody walks in with a wheelbarrow and dumps 10 million on the teller.
[00:11:32] The teller then puts a million of that into the vault and then waits for other people to come and say,
[00:11:38] I want a loan.
[00:11:38] Oh, here we go.
[00:11:39] Here's a little wheelbarrow for you.
[00:11:40] So they then loan out 9 million, which the customers...
[00:11:45] No, but no money is created in that.
[00:11:46] No money is created in that process.
[00:11:48] Yes, it is.
[00:11:48] It's...
[00:11:49] It's only created...
[00:11:51] This is...
[00:11:52] I'm writing a book on this subject right now, which I'll be publishing, I hope, in the next one to two months.
[00:11:59] And what people have in their minds is that effectively they think that the loan they get is going to be written as a,
[00:12:09] you know, entry in their deposit account.
[00:12:11] That's what they think, you know, it's backed by the cash and then you get a loan just like we always do now when you get a loan,
[00:12:18] the bank marks up your deposit account and marks up a loan which is against you as well.
[00:12:23] But that's a textbook model can't work if that happens.
[00:12:28] Because if you try to do that, you've got a million, but you put aside in cash for security and you've got the other 9 million,
[00:12:36] and then you want to lend it out to people, then that means those reserves go down by 1 million.
[00:12:43] And then you're currently give somebody a deposit, which means the deposit's got to go up by 1 million.
[00:12:48] That violates the law of accounting.
[00:12:51] Okay, now you're getting me confused then.
[00:12:54] So I've got, so out of that 10 million, I've decided I'm going to keep a million in cash reserves.
[00:12:59] You're saying I put it in the vault, but surely I'd be putting it in the central bank.
[00:13:02] And then I've got 9 million, which I decide I'm going to loan out.
[00:13:08] Okay.
[00:13:08] Okay, well, try it.
[00:13:09] So this is what, you are correct.
[00:13:12] That is what people think happens.
[00:13:13] So you have 1 million to hang on to and 9 million to give to the central bank.
[00:13:16] And then somebody comes along and says, oh, the line is, say, right, I'm going to lend from reserves.
[00:13:20] I was trying to find-
[00:13:21] No, 9 million doesn't go to the central bank.
[00:13:24] 9 million is the money that I'm lending out.
[00:13:26] The 1 million goes to the central bank.
[00:13:28] Yeah, 1 million goes to the central bank.
[00:13:29] But you then, how do you lend?
[00:13:32] But you also said you put the 9 million in the central bank, so your reserve accounts go up.
[00:13:38] No, I'm saying I've got 10 million's gone in.
[00:13:42] I've got a million in cash reserves, which I'm going to give to the reserve bank and say, there we are.
[00:13:46] That's to, you know, just in case there's a bank run.
[00:13:49] The 9 million, I lend out to people.
[00:13:52] How do you lend it out?
[00:13:53] What form is it?
[00:13:55] Well, it came in in cash.
[00:13:57] I guess I lend it out again in cash.
[00:13:59] Exactly.
[00:14:00] The only way this model works is if all loans are in cash.
[00:14:04] Okay.
[00:14:05] Because if you try to do it by saying, look, I'm going to deposit the whole, you know, I'm going to deposit 10 billion deposited.
[00:14:14] I'm going to hang on to a million of that as a reserve, but put the whole 10 million at the central bank.
[00:14:24] And then I try to lend out from reserves, which at this stage have become electronic.
[00:14:28] If you try to do that with accounting, you'd have a minus 1 million in your reserves and a plus 1 million in your deposits.
[00:14:36] And that is possible by accounting.
[00:14:39] So your argument is because I've got that money in cash, that cash has got to go, physically got to go somewhere.
[00:14:45] Well, yeah, it's the only way it can be done.
[00:14:47] The only way that model they teach in textbooks can work is if all loans are in cash.
[00:14:52] And in fact, the entire monetary system has to be in cash.
[00:14:54] The reserve bank doesn't have electronic accounts now.
[00:14:57] All it's got is paper.
[00:14:59] But that money, which I cajoled from people at the beginning who put their 10 million in savings, I mean, they weren't putting it in cash, though.
[00:15:06] They were just electronic transfers that they made from other banks to put into money.
[00:15:10] I mean, this is one reason I invented Ravel, which used to be called Minsky, but now called Ravel, which has double entry bookkeeping as a way of letting you build a structured view of a financial system.
[00:15:22] And, I mean, building Minsky, when it was first started, taught me about double entry bookkeeping far better than I could ever have learned in a textbook because you had to get the whole thing to work properly as an integrated system of accounts for lenders, borrowers, central banks, treasuries.
[00:15:38] You know, on you go.
[00:15:39] And when you do that, it just becomes natural to see this view of interlocking double entry balance booksheds in my head.
[00:15:48] But the model that's taught at schools, and this is an important point for people to say, why do they choose something that's wrong?
[00:15:55] The reason is that mainstream economics began, you know, way back in the early 1800s with proto-neoclassicals like a guy called Jean-Baptiste Say.
[00:16:06] And if you read his vision of what money does, money is just the classic idea.
[00:16:12] It's a veil over barter.
[00:16:13] Money is used to avoid the double coincidence of wants.
[00:16:16] So the only reason we use money is because if you want to buy bananas and you're trying to sell matchsticks, then you've got to find a person who's selling matchsticks and wants to buy bananas, which is really hard.
[00:16:28] So you go, bananas, cash, matchsticks, it doesn't matter the person you do the cash transaction with.
[00:16:36] So that's the only role that money has.
[00:16:38] And in fact, there's one of my favorite phrases of delusional economics comes from Jean-Baptiste Say in what he calls the catechism of political economy, where he says at one stage, it is thus though merchants, though they all do have them of the air of wanting money for their merchandise, do in fact want merchandise for their merchandise.
[00:16:56] In other words, money is just transparent.
[00:16:57] Don't worry about it.
[00:16:58] So the model, they have to have a model, the classical economists have to have something they can teach their kids, their students, their victims about how money is created because that's important.
[00:17:10] Money is, you know, they want to get rid of it really rapidly by saying here's how money is created and then all transactions can be modeled as if it's barter.
[00:17:19] Right.
[00:17:20] So they don't want to be, they don't want to be correct about the banking system.
[00:17:25] They want to be able to say some model looks like it works and then go on to a barter-based macroeconomic model.
[00:17:30] Okay.
[00:17:31] So when we come back, because we're at a halfway point already, we're going to go step by step.
[00:17:35] You're going to hand-held me.
[00:17:36] You're going to tell me, because I've managed to get all these people to get interested in Dobby Bank.
[00:17:41] You're going to tell me how I'm going to make some money out of this enterprise.
[00:17:44] We'll do that when we come back.
[00:17:47] Wie kann man Risiko im Leben reduzieren?
[00:17:49] Einen Helm tragen.
[00:17:50] Fit bleiben.
[00:17:51] Und die Freunde meiden, die verrückte Ideen haben.
[00:17:53] Und beim Investieren?
[00:17:54] Hier sollte man diversifizieren.
[00:17:56] Wenn du in einen iShares ETF investierst, kaufst du in einem Schritt einen Teil von Hunderten oder Tausenden von Unternehmen.
[00:18:02] So musst du dir keine Sorgen mehr machen.
[00:18:04] Du kannst dir stattdessen lieber Gedanken darüber machen, wer die Fotos von der wilden Nacht mit deinen Freunden gemacht hat.
[00:18:08] Finde iShares bei deinem Broker oder deiner Bank und fange noch heute an, mit ETFs zu sparen.
[00:18:14] Kapitalanlagerisiko.
[00:18:15] Marketinginformation.
[00:18:15] This is the Debunking Economics Podcast with Steve Keen and Phil Dobby.
[00:18:32] Okay, so we are trying to figure out how banks work in reality.
[00:18:37] So, Steve, I've set up Dobby Bank.
[00:18:39] Let's go through this step-by-step then.
[00:18:41] So I've managed to get a banking license.
[00:18:44] It's quite straightforward.
[00:18:45] There's a form at the post office you can fill in.
[00:18:49] And I'm up and operating.
[00:18:50] And I'm going through this step-by-step.
[00:18:51] With a million in equity and a million.
[00:18:54] And 10 million that people have managed to put money in.
[00:18:56] By the way, I'm going through this step-by-step
[00:18:57] because there was one classic comment from somebody.
[00:18:59] I think he even worked on a building site.
[00:19:01] I'm not quite sure where I read it.
[00:19:02] He said, you know, he's very interested in the podcast.
[00:19:05] Whenever he goes and tries to explain it to his mates on the building site,
[00:19:08] he always gets lost halfway through.
[00:19:10] He sort of like starts on the argument
[00:19:12] and then his mates ask a whole load of questions.
[00:19:14] And he goes, God, I wish Steve Keen was here.
[00:19:17] So we've clearly got to go through some of these step-by-step.
[00:19:20] And for me as well, by the way.
[00:19:22] So I've got my 10 million.
[00:19:24] So you said it's a problem if that money is not in cash.
[00:19:29] If I've said to people, OK, open an account, move your – the money you've got in Barclays,
[00:19:34] for example, move it into Dobby Bank.
[00:19:36] I've got 10 million sitting there in my deposits, in my bank accounts.
[00:19:43] Deposits is a confusing word, isn't it?
[00:19:44] But anyway, sitting in deposit accounts in my bank, totaling 10 million.
[00:19:49] But it's not cash.
[00:19:49] It's just money that's been transferred into my bank.
[00:19:51] What's the problem with that?
[00:19:52] Well, because there's no problem at all with that.
[00:19:55] That's what happens in the real world.
[00:19:56] But if you try to make that your – if you try to follow the textbook,
[00:20:00] if you get a hold of – let's just take a textbook at random.
[00:20:04] Let's say Samuelson and Nordhaus, 2016.
[00:20:07] I think it is Macaric.
[00:20:09] What could it be?
[00:20:09] Maybe 2010.
[00:20:11] Macaric and my textbook.
[00:20:12] If you take that and say what they say you do,
[00:20:15] then you'll find at a particular point they say that what you do is you lend out reserves.
[00:20:20] Okay?
[00:20:21] And that's the vision that textbooks issue.
[00:20:23] You've got the reserves.
[00:20:24] You lend them out.
[00:20:26] Okay?
[00:20:26] And as those, it's absolutely no problem in doing that.
[00:20:30] Quite straightforward.
[00:20:31] But then if you do it in double entry bookkeeping terms and you try to follow it,
[00:20:36] there's something – you find that it only works if the form money that it takes coming in
[00:20:43] when people make the deposit is the same form that you use when you pay it out
[00:20:51] because cash is visual.
[00:20:53] Okay?
[00:20:54] And so if you try to lend it out – make an electronic entry,
[00:20:59] so you try to lend from reserves, that means reserves have to go down.
[00:21:04] And if it's going to go out the door of your bank,
[00:21:07] it's got to go down in the form of cash.
[00:21:10] So you're saying – okay, so you're saying –
[00:21:12] because the reason you have reserves, of course,
[00:21:13] is you're protecting yourself in case there's a run on your bank.
[00:21:18] And a run on your bank, people are going to be demanding cash.
[00:21:21] So if people have just paid me in $10 million in electronic money into my bank
[00:21:28] and there's a run on the bank, I physically don't have any cash at all to pay them,
[00:21:34] any hard cash.
[00:21:35] Is that the point?
[00:21:36] That's – well, no.
[00:21:38] This is why I invented the software package that does this for you.
[00:21:42] And that's – you know, I've become so – it's second nature for me.
[00:21:45] So I tend to be – I talk too quickly for people to follow the logic.
[00:21:49] But the basic starting point is that when you deposit cash,
[00:21:55] the story told in the textbook has – the bank can't lend,
[00:21:59] and so it has deposits.
[00:22:01] Okay?
[00:22:01] That's the textbook story.
[00:22:03] So banks have to wait until somebody deposits money.
[00:22:05] Then when the bad person deposits money, ah, they can lend 10% of that.
[00:22:08] Hang on to 10%, lend out 90%.
[00:22:10] That's the sort of idea.
[00:22:12] Now, it sounds – it's – and then what they do is they go through the money multiplier.
[00:22:16] So you – you know, your first bank, as they usually –
[00:22:19] that's a typical imaginative name economists use for this stuff.
[00:22:22] So your first bank, somebody deposits 10 million with you,
[00:22:25] you hang on to 1 million and lend out the 9 million,
[00:22:29] and then the people who lend out 9 million to you,
[00:22:31] they deposit at other banks.
[00:22:32] Let's call it second bank.
[00:22:34] They hang on to 900,000, they're at 8.1 million,
[00:22:37] and you keep on doing it.
[00:22:38] Ultimately, you end up with 10 million,
[00:22:40] at least $100 million worth of money creation,
[00:22:42] and that's called the money multiplier.
[00:22:44] Okay?
[00:22:45] Yeah.
[00:22:45] And that's the textbook way of how banks create money.
[00:22:47] And you try to put that textbook way into a double-entry bookkeeping,
[00:22:50] and the only way it works is if all loans are in cash.
[00:22:53] Period.
[00:22:54] Can you see why, or am I going to dive in there a bit?
[00:22:57] No, I don't see why.
[00:22:58] I understand the argument for the month.
[00:23:00] Because there's double entry, okay?
[00:23:02] That's – double means two.
[00:23:04] Okay.
[00:23:04] Okay.
[00:23:05] So you have to – every time you record a transaction as a bank,
[00:23:09] you have to make two entries.
[00:23:11] Now, if there's a loan from a Dobby person to a Steve person rather than the bank,
[00:23:17] then your bank account goes down, my bank account goes up.
[00:23:20] I then have a debt to you,
[00:23:21] which I record independently of my own personal double-entry bookkeeping.
[00:23:24] But that doesn't turn up.
[00:23:26] The loan itself doesn't turn up on the bank's books
[00:23:28] because the bank is just being an intermediary.
[00:23:30] That's the classic term.
[00:23:32] Okay.
[00:23:32] So let's take in that multiplier then.
[00:23:34] Let's take the first step.
[00:23:36] So the $9 million that was free for loans after I've taken that million in reserves,
[00:23:41] that $9 million that's paid out there,
[00:23:44] and it goes into another bank as a deposit of $9 million.
[00:23:50] Yeah.
[00:23:51] Where's the problem with that?
[00:23:52] What's the other entry that's missing?
[00:23:53] The only way – because double entry.
[00:23:55] Okay.
[00:23:56] If you want to show that you're lending from reserves and you do –
[00:24:00] literally, that means –
[00:24:01] But these are not reserves.
[00:24:02] We're saying this is not reserve cash.
[00:24:04] This is the – because the reserve is the $1 million, isn't it?
[00:24:09] This is why it gets so confusing for people.
[00:24:11] $1 million is in vault cash, okay?
[00:24:14] It's a reserve, but you haven't put it at the central bank.
[00:24:19] But out of the $10 million that was deposited,
[00:24:22] it's not all – on the other side of the balance sheet,
[00:24:24] that is not all reserves, is it?
[00:24:26] It's surely at that point the reserves are whatever I choose to have in reserve,
[00:24:32] and the rest is money which –
[00:24:34] Well, let's drop some accounts here.
[00:24:36] You've got it.
[00:24:37] One – you've got the column reserves,
[00:24:38] and that's your electronic account at the central bank, okay?
[00:24:42] Yeah.
[00:24:43] Then you have vault cash, okay,
[00:24:44] which is the cash you're going to hang on to if –
[00:24:47] that's what that is in ATMs in case you want to take their money out.
[00:24:51] And we'll leave bonds out of the exercise at the moment.
[00:24:54] So you've got the – you've either got the electronic reserves of the central bank
[00:24:58] or you've got money in the vault.
[00:25:00] Now, if you try to transfer the money in the vault to the reserve,
[00:25:06] then what you've got to do is transfer that physical cash to the central bank.
[00:25:12] And now the central bank has a physical – it's got cash,
[00:25:16] but it's – in fact, it's not part of –
[00:25:18] any notes held by the central bank aren't part of the money supply.
[00:25:21] They've been taken out of circulation.
[00:25:24] So you've then got an electronic entry.
[00:25:26] You put your nine – you put your – what, one –
[00:25:29] Oh, dear.
[00:25:30] One million is the –
[00:25:31] Okay, one million.
[00:25:32] Okay, okay.
[00:25:33] Yeah.
[00:25:33] That means – hang on a sec.
[00:25:35] Think about that.
[00:25:35] That means when a run occurs, you haven't got any cash in your ATMs.
[00:25:39] This is why I'm saying you would be actually –
[00:25:44] Well, that was my point, though.
[00:25:45] You needed cash.
[00:25:46] That's why I said how do that money use positive.
[00:25:47] I think I made it on the building site.
[00:25:49] He's just calling off the scaffolding he was on.
[00:25:52] So apologies there.
[00:25:54] But it's because –
[00:25:55] Yeah, yeah.
[00:25:56] See, it's because the textbook model –
[00:25:58] I'm going to get a job in a building site after this.
[00:25:59] Yeah.
[00:25:59] The textbook model is wrong.
[00:26:01] It is simply wrong.
[00:26:03] Okay?
[00:26:03] And it's wrong in double-entry bookkeeping terms.
[00:26:05] But unless you put it in specifically two entries per row,
[00:26:09] you can't see why it's wrong.
[00:26:11] So my –
[00:26:12] But if I've got a million in reserves, surely –
[00:26:15] and I feel like I need half a million in cash, for example –
[00:26:18] surely I can just go to the reserve and say,
[00:26:21] here's a million in electronic money.
[00:26:23] Just give me that in cash, please.
[00:26:24] Yeah, you can.
[00:26:25] You can.
[00:26:26] But let's talk the real world, first of all.
[00:26:29] Because this fix the textbook stuff, you know,
[00:26:31] it ends up you're going crazy because it is crazy.
[00:26:34] People think, I can't understand this.
[00:26:35] I must be stupid.
[00:26:36] No, the textbook's stupid.
[00:26:37] This is how most people see it, though.
[00:26:39] And they're wrong.
[00:26:40] Okay, so let's just –
[00:26:41] the simple, correct way that things happens,
[00:26:43] you have a million pounds in equity.
[00:26:45] I'm trying to figure out why they're wrong.
[00:26:47] That's what I'm trying to understand.
[00:26:50] So I –
[00:26:51] because one question I do wonder is,
[00:26:54] if I've got out of that 10 million –
[00:26:55] and maybe this is closer to what really happens –
[00:26:57] if I've got 10 million in deposits,
[00:27:01] why wouldn't I say,
[00:27:03] well, okay, I –
[00:27:05] why would I say I've got 1 million in cash reserves,
[00:27:07] I'm going to loan out 9 million?
[00:27:09] Why wouldn't I say,
[00:27:10] well, now I've got 10 million.
[00:27:12] I can count that as 10 million in reserves,
[00:27:14] and I'm going to –
[00:27:14] I want to keep 10% in reserves.
[00:27:17] I'm going to loan out 10 times that amount.
[00:27:19] You –
[00:27:21] I think you're suffering textbook-itis,
[00:27:23] and it's time we said you're off to a therapist,
[00:27:25] and I heard this guy called Steve Keen
[00:27:26] charges reasonable rates.
[00:27:28] So let's go backwards a bit and say,
[00:27:31] the term –
[00:27:32] a real bank raises a million in equity, okay,
[00:27:35] therefore –
[00:27:36] and then buys a million –
[00:27:37] normally buys a million worth of government bonds
[00:27:40] for that form of that equity.
[00:27:42] Maybe, hey,
[00:27:42] it hangs with, hey, 100,000 in cash.
[00:27:45] Let's just imagine they buy the whole lot in bonds
[00:27:47] to make it simpler.
[00:27:49] Then what they do is somebody says,
[00:27:51] you know,
[00:27:51] I want a loan,
[00:27:53] and they say,
[00:27:54] oh,
[00:27:54] how much of a loan do you want?
[00:27:55] And they say 10 million pounds.
[00:27:57] And you say,
[00:27:57] okay,
[00:27:58] well,
[00:27:58] that's a big start,
[00:27:59] but I'll give it a go.
[00:28:00] So I'm going to put the number 10 million
[00:28:01] in your deposit account,
[00:28:03] and I'm also going to record
[00:28:05] on a loan account from you
[00:28:07] that you owe me 10 million.
[00:28:09] So what you do,
[00:28:10] you create money
[00:28:11] by having an increase
[00:28:13] in the value of the bank's asset,
[00:28:15] which is loans,
[00:28:16] and an increase in the bank's liability,
[00:28:18] which is the deposits.
[00:28:19] That's all there is to the real world.
[00:28:21] It's that simple.
[00:28:22] Once you're a bank,
[00:28:23] you're able to create
[00:28:24] assets and liabilities.
[00:28:25] You have to mark up both your assets
[00:28:27] and your liabilities.
[00:28:28] Now,
[00:28:28] no other entity
[00:28:30] in the system can do that.
[00:28:31] Some ways did my time
[00:28:32] going out to get people
[00:28:33] to put money into the bank.
[00:28:34] Oh, yeah.
[00:28:34] I should have.
[00:28:36] Yeah,
[00:28:36] you need that cash.
[00:28:37] It's a cheap form
[00:28:38] of having some reserves
[00:28:40] when you're,
[00:28:41] you've got to be good.
[00:28:42] Only,
[00:28:43] the main reason you have reserves
[00:28:44] is for interbank transfers.
[00:28:46] You don't need them
[00:28:47] for lending at all
[00:28:49] in the sense that
[00:28:50] you don't lend them out
[00:28:51] because if you,
[00:28:51] the action that I did
[00:28:53] with what the real world bank does,
[00:28:54] it puts a plus a million
[00:28:56] in your loan account
[00:28:57] and a plus a million
[00:28:58] in the deposit account
[00:28:58] and bang,
[00:28:59] that's it.
[00:28:59] It's created the money.
[00:29:00] It's created the loan.
[00:29:02] It's got an asset.
[00:29:02] You've got to,
[00:29:02] you've got to pay their money now
[00:29:04] at the interest payments over time.
[00:29:05] So it's,
[00:29:06] it's got what it needs.
[00:29:07] If you try to do it
[00:29:08] the textbook way,
[00:29:09] you find all,
[00:29:10] first of all,
[00:29:10] you've got to,
[00:29:11] you know,
[00:29:12] hang on some of the cash
[00:29:13] and then if you,
[00:29:14] let's go back
[00:29:15] to the double entry.
[00:29:16] The double entry
[00:29:16] for the loan
[00:29:17] is plus loans
[00:29:17] and plus liabilities.
[00:29:20] Plus,
[00:29:20] plus loans,
[00:29:21] plus deposit.
[00:29:21] They both go up.
[00:29:22] If you try to do it
[00:29:23] in reserves,
[00:29:24] you're going to have
[00:29:24] a minus reserves
[00:29:25] and if you try to do it
[00:29:26] electronic,
[00:29:27] you're trying to put a plus
[00:29:28] in the deposit account
[00:29:29] does not compute.
[00:29:31] That is an accounting failure
[00:29:32] and in fact,
[00:29:33] you're going to go,
[00:29:33] if you try it
[00:29:34] two or three times,
[00:29:36] you'll go bankrupt.
[00:29:36] Okay?
[00:29:37] Your reserves,
[00:29:37] your assets go down,
[00:29:38] your liabilities go up.
[00:29:39] Pretty certainly,
[00:29:40] but negative equity,
[00:29:41] you're closed down as a bank.
[00:29:42] So the only way
[00:29:43] the textbook model
[00:29:44] can work
[00:29:44] is if you loan,
[00:29:46] your reserves go down
[00:29:47] and your loans go up.
[00:29:48] Now that happens.
[00:29:49] You've got the,
[00:29:51] reserves have gone down,
[00:29:52] loans have gone up,
[00:29:54] does the borrower get the money?
[00:29:56] Now the only way it works
[00:29:57] is if they get a wheelbarrow
[00:29:59] of the stuff
[00:29:59] to wheel out
[00:30:00] the front door of the bank.
[00:30:01] So what happens is
[00:30:02] in the textbook model,
[00:30:03] the only way to make it work
[00:30:04] in double entry terms
[00:30:05] is there's a minus
[00:30:07] in the reserves
[00:30:08] for the bank
[00:30:09] and a plus in the loans
[00:30:10] and then for the borrower,
[00:30:14] there's a plus
[00:30:15] in the liability loan,
[00:30:18] which is the loans.
[00:30:19] There's also a plus
[00:30:20] in the asset they have,
[00:30:22] which is cash.
[00:30:24] Now,
[00:30:25] if you try any other way,
[00:30:27] you cannot make
[00:30:28] the textbook model work.
[00:30:29] So in the,
[00:30:30] I mean,
[00:30:30] in the textbook way,
[00:30:32] the way banks make money,
[00:30:33] of course,
[00:30:33] is that out of that
[00:30:34] 10 million savings,
[00:30:35] they,
[00:30:36] you know,
[00:30:36] they put a bit aside
[00:30:37] and then they loan out
[00:30:38] the rest
[00:30:38] and they charge interest
[00:30:40] on those loans
[00:30:41] and the interest
[00:30:41] is more than the,
[00:30:42] the interest that is paid
[00:30:43] on the,
[00:30:45] to people who've got
[00:30:46] savings in the,
[00:30:46] in the bank
[00:30:47] and the,
[00:30:47] you know,
[00:30:48] the difference adds
[00:30:48] to the equity for the bank
[00:30:49] and that's how
[00:30:50] the bank grows.
[00:30:51] But,
[00:30:52] that's how supposedly
[00:30:54] they make money.
[00:30:54] But we know that banks
[00:30:55] don't lend out
[00:30:56] reserves,
[00:30:58] money from,
[00:30:58] well,
[00:30:59] reserves
[00:30:59] or,
[00:31:00] or deposits generally.
[00:31:02] Although,
[00:31:03] yeah,
[00:31:03] this is what the Bank
[00:31:04] of England,
[00:31:05] like I've been part of a,
[00:31:06] I'm part of a group
[00:31:07] of economists
[00:31:08] in argument,
[00:31:09] in this,
[00:31:09] literally a century
[00:31:10] you can find,
[00:31:11] even works back in the,
[00:31:12] the banking debates
[00:31:13] back in the 1800s,
[00:31:14] you can find the same
[00:31:15] argument being made
[00:31:16] versus the idea
[00:31:17] that banks were intermediaries.
[00:31:18] Now,
[00:31:19] when you,
[00:31:20] when you do the accounting,
[00:31:21] the only way that banking
[00:31:22] works in an electronic form
[00:31:24] in particular
[00:31:25] is if,
[00:31:26] if the banks
[00:31:27] lend money
[00:31:28] and,
[00:31:28] and create,
[00:31:29] lend and create
[00:31:30] at the same time.
[00:31:31] They cannot lend out deposits.
[00:31:32] If they do,
[00:31:33] you don't have demand
[00:31:33] deposits anymore.
[00:31:34] If you had a,
[00:31:35] you know,
[00:31:35] if you were,
[00:31:36] you know,
[00:31:37] if I go to the bank
[00:31:37] and find that because of a loan
[00:31:39] to Dobby Bank,
[00:31:40] my deposit account's gone down
[00:31:41] by 100,000,
[00:31:43] I'm going to come with an ax.
[00:31:44] Well,
[00:31:44] pardon me,
[00:31:44] not use that image
[00:31:45] after recent events,
[00:31:46] but,
[00:31:47] but yeah,
[00:31:48] I'm going to come
[00:31:49] and bloody well demand
[00:31:49] my money back.
[00:31:50] You've lent out my cash.
[00:31:51] Where's my cash?
[00:31:52] So,
[00:31:53] the loanable funds,
[00:31:55] the vision of banks
[00:31:55] is intermediaries,
[00:31:56] lending deposits
[00:31:58] only works
[00:31:58] if the,
[00:31:59] there's no such thing
[00:32:00] as demand deposits.
[00:32:01] Well,
[00:32:01] there are demand deposits,
[00:32:02] so you can't make
[00:32:03] the model work.
[00:32:04] The other one,
[00:32:05] there is the blending out reserves.
[00:32:07] That only works
[00:32:07] if all loans are in cash.
[00:32:07] So, the whole idea of reserves
[00:32:08] is that those demand deposits
[00:32:10] aren't called on
[00:32:11] at the same time though.
[00:32:11] Yeah,
[00:32:11] but then you get
[00:32:13] the double entry trouble.
[00:32:14] If you want to show
[00:32:15] that you can make a loan
[00:32:16] without reducing the deposits,
[00:32:18] then the only way
[00:32:19] you can do that
[00:32:19] is reserves go down
[00:32:20] and loans go up
[00:32:22] and that only works
[00:32:24] if you're lending out
[00:32:24] something which the borrower
[00:32:26] can take out of the bank itself
[00:32:27] and that's cash.
[00:32:29] So,
[00:32:29] the only way
[00:32:30] the textbook model works
[00:32:31] is of all loans,
[00:32:32] in fact,
[00:32:33] the whole bloody monetary system,
[00:32:34] including the central bank's accounts,
[00:32:35] all done in cash.
[00:32:36] Now,
[00:32:37] that just says,
[00:32:38] well,
[00:32:38] maybe that was the case
[00:32:40] 5,000 years ago
[00:32:41] in Mesopotamia
[00:32:43] or maybe it was the case
[00:32:44] in the 19th century
[00:32:45] in the Wild West,
[00:32:46] maybe,
[00:32:47] but it certainly
[00:32:48] isn't the real world now.
[00:32:49] So,
[00:32:50] the textbook model
[00:32:51] doesn't apply
[00:32:52] to the real world
[00:32:52] and in fact,
[00:32:53] the Bank of England
[00:32:54] came out and said it
[00:32:54] in 2014.
[00:32:56] The Bundesbank
[00:32:57] came out and said it
[00:32:57] in 2017
[00:32:59] and what do they do
[00:33:00] in 2022?
[00:33:01] They give the Nobel Prize
[00:33:02] to Bloody Bernanke
[00:33:03] who continues to insist
[00:33:04] in the model
[00:33:05] of loanable funds.
[00:33:06] So,
[00:33:06] they don't want
[00:33:07] to know the truth
[00:33:08] and that's why I say
[00:33:09] don't study at economics
[00:33:10] at a university.
[00:33:12] They'll fill your head
[00:33:12] with the full of notions
[00:33:13] that they're simply
[00:33:14] either practically
[00:33:15] or logically
[00:33:16] or empirically wrong
[00:33:17] and this is probably
[00:33:18] one of the most important ones.
[00:33:20] The wrong ideas
[00:33:20] they get in people's heads.
[00:33:22] Right.
[00:33:23] So,
[00:33:23] I understand
[00:33:23] it's like flipping
[00:33:25] the idea on your head.
[00:33:26] If a bank is starting out,
[00:33:27] it starts out
[00:33:28] by giving loans
[00:33:30] and
[00:33:31] creating deposits.
[00:33:33] Yeah.
[00:33:33] Yeah.
[00:33:34] And exactly
[00:33:35] the fact that
[00:33:35] the deposits
[00:33:36] in the bank
[00:33:37] are there
[00:33:38] is because
[00:33:39] you've given loans
[00:33:40] that have filled
[00:33:41] in those deposits
[00:33:42] not because
[00:33:43] people have come
[00:33:44] and put deposits
[00:33:45] in the bank
[00:33:45] and you said,
[00:33:46] that's handy.
[00:33:47] I'm going to loan
[00:33:47] a chunk out of that.
[00:33:49] It's the other way around.
[00:33:51] Exactly.
[00:33:51] Yeah.
[00:33:52] But if
[00:33:54] it wasn't,
[00:33:55] it's like a chicken
[00:33:56] and egg question.
[00:33:57] I'm still struggling
[00:33:58] with the
[00:33:58] if you've got those
[00:34:00] if you've got deposits
[00:34:02] and you aren't
[00:34:03] loaning money out
[00:34:04] then you're
[00:34:05] a mug surely.
[00:34:06] I mean,
[00:34:07] you've got to do
[00:34:07] something with that money
[00:34:08] and you're not just
[00:34:08] going to hang on to it
[00:34:10] without it being productive.
[00:34:11] I mean,
[00:34:11] you need some money
[00:34:13] for the lubrication
[00:34:15] of the financial system.
[00:34:16] You know,
[00:34:16] if you're
[00:34:18] I'm banking a Barclays
[00:34:19] and you're
[00:34:20] a Dobby bank
[00:34:21] there's got to be
[00:34:22] a transfer of reserves
[00:34:23] between the two
[00:34:24] to enable
[00:34:25] any commercial transaction
[00:34:26] that goes from
[00:34:27] a customer of one bank
[00:34:28] to a customer of another
[00:34:29] you've got to have
[00:34:29] the reserves there.
[00:34:30] You need the cash on hand
[00:34:31] in case there is a run
[00:34:33] if people actually
[00:34:34] you know,
[00:34:34] a certain amount of people
[00:34:35] take cash out
[00:34:36] you know,
[00:34:37] on a daily basis
[00:34:38] you need a cash buffer
[00:34:39] there is
[00:34:39] and it can't be
[00:34:41] your bank
[00:34:42] and that's where
[00:34:43] the HR
[00:34:43] So I've got to have
[00:34:44] physical cash reserves
[00:34:46] however much money
[00:34:47] that is
[00:34:48] to fill the machines
[00:34:49] and probably
[00:34:49] increasingly
[00:34:50] small amount of money
[00:34:51] that's needed
[00:34:51] to do that
[00:34:52] and then I've got
[00:34:52] to have reserves
[00:34:53] which sit
[00:34:54] with the central bank
[00:34:55] as you say
[00:34:56] to lubricate
[00:34:56] the exchange of money
[00:34:57] from one bank
[00:34:58] to the next
[00:34:59] to try and
[00:35:01] because of our differences
[00:35:02] in demand and supply
[00:35:03] for money on each side
[00:35:04] on a day-to-day basis.
[00:35:06] And then people ask
[00:35:06] you know,
[00:35:08] the people say
[00:35:09] why do banks
[00:35:09] pay interest on deposits
[00:35:10] in that case?
[00:35:11] If you take your
[00:35:12] money out
[00:35:13] which is a liability
[00:35:14] of the bank
[00:35:14] they've got to lose
[00:35:15] an asset as well
[00:35:16] and that is not
[00:35:18] exactly a good
[00:35:18] situation for a bank
[00:35:19] their perverse situation
[00:35:21] is rising assets
[00:35:21] and rising liabilities
[00:35:23] because that's how
[00:35:24] they create assets
[00:35:25] for themselves
[00:35:26] that they can make
[00:35:26] an income out of
[00:35:27] so the idea of negative
[00:35:29] that is not a good thing
[00:35:29] so you give an entusement
[00:35:31] for people not to take
[00:35:32] their money out
[00:35:33] of the deposit accounts
[00:35:33] you pay a small amount
[00:35:34] of interest on that
[00:35:35] and you also
[00:35:36] when you look at
[00:35:37] the hierarchy
[00:35:38] of the amount
[00:35:38] of interest rates
[00:35:39] you pay
[00:35:40] you pay more
[00:35:40] to borrow
[00:35:40] off another bank
[00:35:41] you pay more
[00:35:42] to borrow
[00:35:42] off the central bank
[00:35:43] so it's a decision
[00:35:44] of a way
[00:35:45] in which you allocate
[00:35:46] your liabilities
[00:35:47] it's not something
[00:35:48] you have to have
[00:35:48] and able to be lending
[00:35:49] able to lend
[00:35:50] in the first place.
[00:35:51] Right
[00:35:51] but if I've got
[00:35:53] more deposits
[00:35:55] and I've got
[00:35:56] than I
[00:35:56] you know
[00:35:57] and I've got
[00:35:57] I've got reserves
[00:35:58] I've got more than enough
[00:36:00] to cover reserves
[00:36:01] to cover
[00:36:01] as we talked about
[00:36:02] lubricating
[00:36:03] exchange of money
[00:36:04] between banks
[00:36:05] and I've still got
[00:36:06] a chunk of money
[00:36:06] left over
[00:36:07] what do I do
[00:36:08] with that?
[00:36:08] You try to
[00:36:08] accept more loans
[00:36:09] you try to reduce
[00:36:11] your calculations
[00:36:12] aren't on that front
[00:36:13] they're
[00:36:13] how much
[00:36:14] what gearing
[00:36:14] do I want
[00:36:15] between my equity
[00:36:16] and my assets
[00:36:17] you know
[00:36:18] how much
[00:36:18] if I've got a million
[00:36:19] in equity
[00:36:20] how do I turn it
[00:36:20] into an income
[00:36:22] earning asset
[00:36:23] that'll get me
[00:36:23] a million a year
[00:36:24] and I'm trying
[00:36:25] to get
[00:36:26] a profit
[00:36:27] out of my
[00:36:27] equity situation
[00:36:28] and you look
[00:36:29] at your leverage
[00:36:30] when you're equity
[00:36:30] and you
[00:36:32] between your
[00:36:33] So I'm leveraging
[00:36:33] my equity
[00:36:34] so if I've got
[00:36:34] a million in equity
[00:36:35] and I say
[00:36:36] well I want
[00:36:37] 10% just to be
[00:36:38] on the seats
[00:36:38] then I can loan
[00:36:39] out 10 million
[00:36:40] but you might
[00:36:40] go to like
[00:36:41] during the financial
[00:36:41] crisis
[00:36:42] particularly some
[00:36:43] of the merchant
[00:36:43] banks went to
[00:36:44] sort of 30 to 1
[00:36:45] levels
[00:36:45] and that means
[00:36:46] that if there's
[00:36:47] the fragility
[00:36:48] of the financial
[00:36:49] system comes
[00:36:49] by excessive
[00:36:50] leverage
[00:36:50] from banks
[00:36:52] lending out
[00:36:53] a large
[00:36:54] market
[00:37:05] and this is
[00:37:06] what my
[00:37:07] academic
[00:37:08] accession
[00:37:08] for 40
[00:37:09] years or so
[00:37:10] has been
[00:37:11] on the dynamics
[00:37:11] of private
[00:37:12] debt
[00:37:12] because that's
[00:37:13] what causes
[00:37:14] economic crises
[00:37:15] it's the
[00:37:16] private debt
[00:37:16] that matters
[00:37:17] not the
[00:37:17] government
[00:37:17] debt
[00:37:18] but the
[00:37:18] way it's
[00:37:19] created
[00:37:19] is completely
[00:37:20] different
[00:37:20] how the
[00:37:20] textbooks
[00:37:21] teach
[00:37:21] about
[00:37:21] it
[00:37:22] and the
[00:37:23] textbook
[00:37:23] model
[00:37:24] is both
[00:37:25] wrong
[00:37:25] simply isn't
[00:37:27] how loans
[00:37:27] are created
[00:37:28] and puts
[00:37:29] the power
[00:37:29] on the
[00:37:31] depositor
[00:37:31] when the
[00:37:32] power of money
[00:37:33] creation
[00:37:33] actually comes
[00:37:34] with the banks
[00:37:34] but how does
[00:37:36] that look
[00:37:36] on a balance
[00:37:36] sheet then
[00:37:37] so if I've
[00:37:38] got say
[00:37:38] I've got
[00:37:38] my 10
[00:37:40] million
[00:37:40] that people
[00:37:41] have deposited
[00:37:42] in the bank
[00:37:42] and I've got
[00:37:43] a million
[00:37:43] in equity
[00:37:44] and I decide
[00:37:45] I'm going
[00:37:46] to loan
[00:37:47] out at
[00:37:47] a ratio
[00:37:48] of 30
[00:37:49] to 1
[00:37:49] to my
[00:37:49] equity
[00:37:50] so I loan
[00:37:50] out
[00:37:51] 30
[00:37:51] million
[00:37:53] but I've
[00:37:54] got 10
[00:37:54] million sitting
[00:37:55] in bank
[00:37:55] accounts
[00:37:56] I've created
[00:37:56] that extra
[00:37:57] money
[00:37:57] I'm not
[00:37:58] touching
[00:37:58] that 10
[00:37:58] million
[00:37:59] so doesn't
[00:38:00] that mean
[00:38:00] my balance
[00:38:01] sheet is
[00:38:02] unbalanced
[00:38:02] at that point
[00:38:03] no you
[00:38:03] wouldn't
[00:38:04] no bank
[00:38:05] is going
[00:38:05] to start
[00:38:05] at 30
[00:38:06] to 1
[00:38:06] but
[00:38:10] during a
[00:38:10] financial
[00:38:11] bubble
[00:38:12] you may
[00:38:12] find yourself
[00:38:13] creating more
[00:38:15] and more
[00:38:15] loans
[00:38:16] which is
[00:38:16] creating more
[00:38:17] and more
[00:38:17] deposits
[00:38:18] and getting
[00:38:19] to this
[00:38:19] stage
[00:38:19] where the
[00:38:20] ratio
[00:38:20] of those
[00:38:21] loans
[00:38:21] to your
[00:38:22] equity
[00:38:22] goes from
[00:38:23] 10 to 1
[00:38:24] to 20
[00:38:24] to 1
[00:38:25] to 30
[00:38:25] to 1
[00:38:25] and then
[00:38:25] you're in
[00:38:26] trouble
[00:38:26] if anything
[00:38:26] starts to fall
[00:38:27] over
[00:38:27] you get
[00:38:29] a 3%
[00:38:30] fall
[00:38:31] even like
[00:38:32] this is
[00:38:33] actually the
[00:38:33] case with
[00:38:34] Silicon Valley
[00:38:35] Bank
[00:38:36] because they're
[00:38:36] holding long
[00:38:37] term bonds
[00:38:37] the increase
[00:38:39] in the
[00:38:39] interest rate
[00:38:40] reduced the
[00:38:41] value of
[00:38:41] those bonds
[00:38:42] and that's
[00:38:43] what sent
[00:38:43] them bankrupt
[00:38:43] because
[00:38:44] they didn't
[00:38:46] have many
[00:38:47] in the
[00:38:47] way of
[00:38:47] loans
[00:38:47] but there
[00:38:48] was the
[00:38:48] fall in
[00:38:48] the value
[00:38:49] of their
[00:38:49] assets
[00:38:50] that put
[00:38:50] them into
[00:38:51] negative
[00:38:51] equity
[00:38:52] so
[00:38:54] we're getting
[00:38:55] a bit away
[00:38:55] from the
[00:38:56] fundamental
[00:38:56] basic
[00:38:57] point
[00:38:57] banks
[00:38:58] create
[00:38:58] money
[00:38:58] by
[00:38:58] creating
[00:38:59] debt
[00:38:59] and that's
[00:39:00] the real
[00:39:00] world
[00:39:01] and the
[00:39:01] textbooks
[00:39:01] don't
[00:39:02] teach
[00:39:02] it
[00:39:02] why
[00:39:03] because
[00:39:03] if they
[00:39:04] do
[00:39:04] teach
[00:39:04] that
[00:39:04] it
[00:39:05] unravels
[00:39:06] the
[00:39:06] entire
[00:39:06] fabric
[00:39:06] of
[00:39:07] neoclassical
[00:39:07] economics
[00:39:08] the whole
[00:39:08] bloody thing
[00:39:09] falls
[00:39:13] banks lend
[00:39:14] because
[00:39:15] they end
[00:39:17] up believing
[00:39:18] their own
[00:39:19] models
[00:39:19] but they
[00:39:22] don't want
[00:39:23] to know
[00:39:24] what the
[00:39:24] real banks
[00:39:24] do
[00:39:25] and so
[00:39:26] my bunch
[00:39:26] of
[00:39:27] economists
[00:39:27] have been
[00:39:27] screaming
[00:39:28] at the
[00:39:28] Citadel
[00:39:29] for 100
[00:39:30] years
[00:39:30] very loudly
[00:39:31] in the last
[00:39:32] 60 years
[00:39:33] that banks
[00:39:33] create money
[00:39:34] by creating
[00:39:34] debt
[00:39:36] finally
[00:39:36] in 2014
[00:39:37] we thought
[00:39:38] my god
[00:39:38] we've got
[00:39:38] the Bank
[00:39:38] of England
[00:39:39] on our
[00:39:39] side
[00:39:39] surely
[00:39:40] they
[00:39:40] can't
[00:39:40] textbook
[00:39:41] writers
[00:39:41] can't
[00:39:42] continue
[00:39:42] teaching
[00:39:43] this
[00:39:43] nonsense
[00:39:43] when the
[00:39:44] Bank
[00:39:44] of
[00:39:44] England
[00:39:44] and then
[00:39:44] the
[00:39:45] Bundesbank
[00:39:45] joins
[00:39:46] in and
[00:39:46] says
[00:39:46] look
[00:39:47] if you're
[00:39:47] teaching
[00:39:47] what is
[00:39:48] simply
[00:39:48] wrong
[00:39:48] the
[00:39:49] textbooks
[00:39:49] are
[00:39:49] wrong
[00:39:49] and that's
[00:39:50] literally
[00:39:50] a quote
[00:39:51] from the
[00:39:51] Bank
[00:39:51] of
[00:39:52] England
[00:39:52] but
[00:39:52] they
[00:39:52] can't
[00:39:53] continue
[00:39:53] oh yes
[00:39:53] they can
[00:39:54] they still
[00:39:54] teach
[00:39:55] the same
[00:39:55] shit
[00:39:55] because
[00:39:56] if
[00:39:57] you
[00:39:57] admit
[00:39:57] it
[00:39:57] then
[00:39:58] there
[00:39:58] goes
[00:39:59] the
[00:39:59] rest
[00:39:59] of
[00:39:59] your
[00:39:59] edifice
[00:39:59] so
[00:40:00] is
[00:40:01] the
[00:40:01] idea
[00:40:01] of
[00:40:01] the
[00:40:01] multiplier
[00:40:02] wrong
[00:40:02] as well
[00:40:02] then
[00:40:03] so
[00:40:03] if
[00:40:03] I
[00:40:05] lend
[00:40:07] out
[00:40:08] say
[00:40:09] 30
[00:40:09] million
[00:40:11] we're
[00:40:11] back
[00:40:12] on the
[00:40:12] same
[00:40:12] no you
[00:40:12] didn't
[00:40:13] loan
[00:40:13] out
[00:40:13] you
[00:40:13] created
[00:40:14] the
[00:40:15] language
[00:40:16] so
[00:40:17] I
[00:40:18] create
[00:40:18] 30
[00:40:18] million
[00:40:19] which
[00:40:22] is
[00:40:22] given
[00:40:22] as a
[00:40:22] loan
[00:40:24] even
[00:40:25] though
[00:40:25] I'm
[00:40:25] not
[00:40:25] lending
[00:40:25] it
[00:40:26] out
[00:40:26] okay
[00:40:27] but
[00:40:27] that
[00:40:28] loan
[00:40:28] for
[00:40:29] 30
[00:40:29] million
[00:40:29] which
[00:40:29] I
[00:40:29] have
[00:40:29] created
[00:40:30] goes
[00:40:31] into
[00:40:31] a
[00:40:32] bank
[00:40:32] account
[00:40:33] possibly
[00:40:34] at
[00:40:34] another
[00:40:34] bank
[00:40:35] but
[00:40:35] you're
[00:40:36] saying
[00:40:36] but
[00:40:36] if
[00:40:36] it
[00:40:58] 30
[00:40:59] million
[00:40:59] you
[00:41:00] get
[00:41:00] the
[00:41:00] loan
[00:41:00] and
[00:41:00] you
[00:41:00] transfer
[00:41:01] it
[00:41:01] to
[00:41:01] the
[00:41:01] builder
[00:41:02] now
[00:41:02] if
[00:41:02] the
[00:41:02] builder
[00:41:02] happens
[00:41:03] not
[00:41:03] to
[00:41:04] bank
[00:41:04] at
[00:41:04] the
[00:41:05] bank
[00:41:05] Adobe
[00:41:06] then
[00:41:07] that
[00:41:07] 30
[00:41:08] million
[00:41:08] is
[00:41:28] goes
[00:41:29] goes
[00:41:29] to
[00:41:29] somebody
[00:41:29] else's
[00:41:30] bank
[00:41:30] account
[00:41:30] it's
[00:41:31] still
[00:41:31] sitting
[00:41:31] there
[00:41:31] as
[00:41:32] the
[00:41:32] very
[00:41:33] first
[00:41:33] stage
[00:41:35] for
[00:41:35] loans
[00:41:35] like
[00:41:36] that
[00:41:36] the
[00:41:36] very
[00:41:36] first
[00:41:37] stage
[00:41:37] is
[00:41:38] that
[00:41:38] your
[00:41:38] deposit
[00:41:39] account
[00:41:39] goes
[00:41:40] up
[00:41:40] and
[00:41:41] then
[00:41:41] you
[00:41:42] make
[00:41:42] the
[00:41:42] 30
[00:41:42] million
[00:41:43] transfer
[00:41:43] it
[00:41:43] happens
[00:41:44] and
[00:41:44] anybody
[00:41:44] who's
[00:41:45] built
[00:41:45] a
[00:41:45] house
[00:41:45] knows
[00:41:46] that
[00:41:46] you
[00:41:46] go
[00:41:46] through
[00:41:46] you
[00:41:47] pay
[00:41:47] installments
[00:41:48] you
[00:41:48] get a
[00:41:49] loan
[00:41:49] from
[00:41:49] the
[00:41:49] bank
[00:41:49] which
[00:41:49] enables
[00:41:50] you
[00:41:50] to
[00:41:50] pay
[00:41:50] the
[00:41:51] total
[00:41:51] cost
[00:41:52] of
[00:41:52] the
[00:41:52] building
[00:41:53] you
[00:41:57] then
[00:41:57] pay
[00:42:01] the
[00:42:02] invoice
[00:42:02] by
[00:42:03] accessing
[00:42:03] the
[00:42:04] line
[00:42:04] of
[00:42:04] credit
[00:42:04] that
[00:42:05] the
[00:42:05] loan
[00:42:05] is
[00:42:06] for
[00:42:06] you
[00:42:06] you
[00:42:07] have
[00:42:07] a
[00:42:07] million
[00:42:07] loan
[00:42:08] you
[00:42:08] haven't
[00:42:08] spent
[00:42:08] anything
[00:42:09] yet
[00:42:09] first
[00:42:09] installment
[00:42:10] comes
[00:42:10] in
[00:42:10] the
[00:42:10] builder
[00:42:10] wants
[00:42:10] 100,000
[00:42:11] you
[00:42:12] then
[00:42:12] write
[00:42:13] 100,000
[00:42:13] as
[00:42:14] a
[00:42:14] transfer
[00:42:15] and
[00:42:16] that
[00:42:16] that
[00:42:17] then
[00:42:17] means
[00:42:18] that
[00:42:18] loan
[00:42:18] is
[00:42:18] accessed
[00:42:19] so
[00:42:19] you
[00:42:19] have
[00:42:19] 100,000
[00:42:20] loan
[00:42:20] and
[00:42:20] that
[00:42:21] money
[00:42:21] is
[00:42:21] transferred
[00:42:22] to
[00:42:22] the
[00:42:22] builder
[00:42:22] so
[00:42:24] the
[00:42:25] argument
[00:42:25] that
[00:42:26] that
[00:42:26] whole
[00:42:27] multiplier
[00:42:27] effect
[00:42:28] creates
[00:42:29] money
[00:42:29] is
[00:42:29] because
[00:42:29] of
[00:42:29] this
[00:42:30] idea
[00:42:30] that
[00:42:31] the
[00:42:31] money
[00:42:32] is
[00:42:32] being
[00:42:32] lent
[00:42:33] from
[00:42:34] the
[00:42:36] money
[00:42:36] that's
[00:42:36] being
[00:42:37] deposited
[00:42:37] which
[00:42:37] is
[00:42:37] not
[00:42:37] the
[00:42:38] case
[00:42:38] you're
[00:42:39] saying
[00:42:39] that
[00:42:39] it's
[00:42:40] created
[00:42:40] and
[00:42:41] it's
[00:42:41] linked
[00:42:41] to
[00:42:41] the
[00:42:41] equity
[00:42:42] not
[00:42:43] to
[00:42:43] the
[00:42:43] deposits
[00:42:43] that
[00:42:44] are
[00:42:44] sitting
[00:42:44] in
[00:42:44] the
[00:42:44] bank
[00:42:45] the
[00:42:45] amount
[00:42:46] bankers
[00:42:46] willing
[00:42:46] to
[00:42:46] create
[00:42:47] the
[00:42:47] loans
[00:42:47] is
[00:42:47] more
[00:42:47] governed
[00:42:48] by
[00:42:48] their
[00:42:48] equity
[00:42:48] than
[00:42:49] it
[00:42:49] is
[00:42:49] by
[00:42:49] their
[00:42:50] reserve
[00:42:51] ratios
[00:42:51] but
[00:42:52] anybody
[00:42:53] who
[00:42:53] doesn't
[00:42:53] know
[00:42:53] reserve
[00:42:54] ratios
[00:42:54] virtually
[00:42:55] no
[00:42:55] longer
[00:42:55] exist
[00:42:56] America
[00:42:56] abolished
[00:42:57] theirs
[00:42:57] and
[00:42:57] during
[00:42:58] COVID
[00:42:58] I
[00:42:59] think
[00:42:59] about
[00:42:59] the
[00:42:59] only
[00:42:59] country
[00:43:00] one
[00:43:00] of
[00:43:00] the
[00:43:00] few
[00:43:00] countries
[00:43:00] on
[00:43:01] planet
[00:43:01] that
[00:43:01] has
[00:43:01] reserve
[00:43:02] ratio
[00:43:02] of
[00:43:02] commons
[00:43:03] is
[00:43:03] China
[00:43:03] but
[00:43:24] the
[00:43:24] money
[00:43:24] money
[00:43:24] creation
[00:43:24] system
[00:43:25] when
[00:43:25] you
[00:43:25] look
[00:43:26] at
[00:43:26] them
[00:43:26] there's
[00:43:26] a
[00:43:26] great
[00:43:26] paper
[00:43:26] by
[00:43:27] a
[00:43:27] guy
[00:43:27] called
[00:43:27] O'Brien
[00:43:28] for
[00:43:28] the
[00:43:28] federal
[00:43:29] reserve
[00:43:29] working
[00:43:30] paper
[00:43:30] in
[00:43:30] 2007
[00:43:32] there was
[00:43:33] reserve
[00:43:33] requirements
[00:43:33] in
[00:43:34] OECD
[00:43:34] countries
[00:43:35] and
[00:43:35] the
[00:43:35] American
[00:43:36] when
[00:43:36] you
[00:43:36] read
[00:43:36] the
[00:43:36] American
[00:43:37] system
[00:43:38] it
[00:43:38] had
[00:43:38] a
[00:43:39] 10%
[00:43:39] reserve
[00:43:39] requirement
[00:43:40] but
[00:43:40] it
[00:43:54] was
[00:43:54] household
[00:43:54] deposits
[00:43:55] now
[00:43:55] the
[00:43:55] reason
[00:43:55] for
[00:43:56] that
[00:43:56] is
[00:43:56] if
[00:43:56] there's
[00:43:57] going
[00:43:57] to
[00:43:57] be
[00:43:57] a
[00:43:57] run
[00:43:57] in
[00:43:57] the
[00:43:57] bank
[00:43:57] it's
[00:43:58] highly
[00:43:58] unlikely
[00:43:58] that
[00:43:59] more
[00:43:59] than
[00:43:59] 10%
[00:44:15] of
[00:44:25] became
[00:44:25] the
[00:44:25] governor
[00:44:26] when
[00:44:26] the
[00:44:26] next
[00:44:26] financial
[00:44:27] crash
[00:44:27] occurred
[00:44:28] and
[00:44:28] that
[00:44:28] was
[00:44:28] quite
[00:44:28] justified
[00:44:30] but
[00:44:31] it's
[00:44:31] a
[00:44:32] false
[00:44:32] model
[00:44:32] derived
[00:44:33] out
[00:44:33] of
[00:44:33] the
[00:44:33] practice
[00:44:34] that
[00:44:34] banks
[00:44:34] had
[00:44:34] of
[00:44:34] hanging
[00:44:35] on
[00:44:35] to
[00:44:35] a
[00:44:35] fraction
[00:44:35] of
[00:44:36] the
[00:44:36] cash
[00:44:36] in
[00:44:36] case
[00:44:37] there
[00:44:37] was
[00:44:37] a
[00:44:37] run
[00:44:37] that's
[00:44:38] what
[00:44:38] reserves
[00:44:38] actually
[00:44:39] did
[00:44:39] right
[00:44:39] but
[00:44:40] if
[00:44:41] it
[00:44:41] was
[00:44:54] that
[00:44:55] we're
[00:44:55] covering
[00:44:55] our
[00:44:56] deposits
[00:44:56] well you
[00:44:56] are
[00:44:57] because
[00:44:57] you
[00:44:57] created
[00:44:57] the
[00:44:58] deposits
[00:44:58] with
[00:44:58] the
[00:44:58] loans
[00:44:58] that
[00:44:58] you've
[00:44:59] just
[00:44:59] issued
[00:44:59] yeah
[00:44:59] and
[00:44:59] you
[00:45:01] can't
[00:45:01] make
[00:45:02] that
[00:45:02] model
[00:45:02] work
[00:45:03] using
[00:45:03] the
[00:45:04] technology
[00:45:04] that
[00:45:04] banks
[00:45:05] use
[00:45:05] which
[00:45:05] is
[00:45:05] double
[00:45:05] entry
[00:45:06] bookkeeping
[00:45:06] so
[00:45:07] that's
[00:45:07] why
[00:45:07] I
[00:45:07] say
[00:45:07] don't
[00:45:08] even
[00:45:08] read
[00:45:09] it
[00:45:09] don't
[00:45:10] buy
[00:45:11] a
[00:45:12] university
[00:45:12] economics
[00:45:13] textbook
[00:45:13] do
[00:45:14] not
[00:45:14] do
[00:45:14] it
[00:45:14] you
[00:45:15] end
[00:45:16] up
[00:45:16] getting
[00:45:17] a
[00:45:17] completely
[00:45:17] fictional
[00:45:18] view
[00:45:18] of
[00:45:18] the
[00:45:18] system
[00:45:18] which
[00:45:19] seems
[00:45:19] coherent
[00:45:20] but
[00:45:20] it's
[00:45:20] full
[00:45:21] of
[00:45:21] little
[00:45:22] logical
[00:45:23] flaws
[00:45:23] like
[00:45:23] this
[00:45:23] when
[00:45:43] you
[00:45:43] the
[00:45:43] money
[00:45:43] system
[00:45:44] doesn't
[00:45:44] affect
[00:45:44] real
[00:45:45] output
[00:45:45] it
[00:45:45] just
[00:45:45] affects
[00:45:45] prices
[00:45:46] so
[00:45:46] I've
[00:45:47] now
[00:45:47] got
[00:45:47] a
[00:45:47] theory
[00:45:47] of
[00:45:47] inflation
[00:45:48] but
[00:45:48] I
[00:45:48] know
[00:45:49] the
[00:45:49] money
[00:45:49] supply
[00:45:49] doesn't
[00:45:50] affect
[00:45:50] real
[00:45:50] level
[00:45:50] of
[00:45:51] output
[00:45:51] and
[00:45:51] that's
[00:45:51] completely
[00:45:51] right
[00:45:52] so
[00:45:52] got all
[00:45:53] of that
[00:45:53] except
[00:45:53] for
[00:45:53] the
[00:45:54] importance
[00:45:55] of
[00:45:55] the
[00:45:56] cash
[00:45:56] component
[00:45:57] perhaps
[00:45:57] I'm
[00:45:57] being
[00:45:57] very
[00:45:57] slow
[00:45:58] on
[00:45:58] that
[00:45:58] but
[00:45:58] we
[00:45:58] are
[00:45:58] out
[00:45:58] of
[00:45:58] time
[00:45:59] so
[00:45:59] we'll
[00:45:59] have
[00:45:59] to
[00:46:00] revisit
[00:46:01] that
[00:46:01] another
[00:46:02] time
[00:46:02] it
[00:46:02] is
[00:46:02] worth
[00:46:03] revisiting
[00:46:03] that
[00:46:03] Bank
[00:46:04] of
[00:46:04] England
[00:46:04] paper
[00:46:05] if you
[00:46:05] find
[00:46:06] it
[00:46:06] because
[00:46:06] it
[00:46:06] does
[00:46:06] a
[00:46:06] neat
[00:46:07] job
[00:46:07] of
[00:46:07] explaining
[00:46:08] how
[00:46:08] the
[00:46:08] balance
[00:46:08] sheet
[00:46:09] works
[00:46:09] in
[00:46:09] banks
[00:46:10] and
[00:46:10] how
[00:46:11] money
[00:46:11] creation
[00:46:11] is
[00:46:12] a
[00:46:12] result
[00:46:13] because
[00:46:13] you're
[00:46:13] stacking
[00:46:14] the
[00:46:14] chart
[00:46:14] with
[00:46:15] extra
[00:46:15] money
[00:46:16] rather
[00:46:16] than
[00:46:17] just
[00:46:17] divvying
[00:46:18] up
[00:46:18] what
[00:46:18] you've
[00:46:18] got
[00:46:19] in
[00:46:19] as
[00:46:19] deposits
[00:46:20] so
[00:46:21] we'll
[00:46:21] leave
[00:46:21] it
[00:46:35] because
[00:46:36] we
[00:46:36] want
[00:46:36] to
[00:46:36] look
[00:46:36] at
[00:46:36] the
[00:46:37] operation
[00:46:37] of
[00:46:37] central
[00:46:38] banks
[00:46:38] in
[00:46:39] open
[00:46:39] markets
[00:46:40] for
[00:46:40] example
[00:46:41] do
[00:46:42] they
[00:46:42] make
[00:46:42] life
[00:46:42] more
[00:46:42] complicated
[00:46:43] than
[00:46:43] it
[00:46:43] needs
[00:46:44] to
[00:46:44] be
[00:46:44] and
[00:46:44] in
[00:46:44] fact
[00:46:44] are
[00:46:44] they
[00:46:44] doing
[00:46:45] the
[00:46:45] right
[00:46:45] thing
[00:46:45] we'll
[00:46:45] look
[00:46:45] at
[00:46:45] all
[00:46:46] that
[00:46:46] next
[00:46:46] week
[00:46:46] lots
[00:46:46] to
[00:46:47] cover
[00:46:47] good
[00:46:47] talk
[00:46:48] Steve
[00:46:48] see
[00:46:49] you
[00:46:49] next
[00:46:49] week
[00:47:43] So
[00:47:53] Start your test today for 1 euro per month on shopify.de.
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[00:48:07] you might also enjoy the Y-Curve each week.
[00:48:10] Roger Hearing and I talked to a guest about a topic that is very much in the news that week.
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