![]() ![]() Note, and I'll have to give them 500 pieces of gold, so Point, someone might give me back that 500 gold-piece bank That'd be my liability, right? Because I know that at some Pieces, I could give a 500 gold-piece bank note out. I mean, I could even have aĭenomination that's- it could be a 500 gold piece. Safe, but you have something that you can transact with So we're assuming that youĬan't forge this thing. Unaffiliated with Sal, could go out and print these things. Unaffiliated with this trustworthy bank, completely They were easy to forge, then someone maybe completely Very hard to forge, and that's a key issue there, because if Is your gold safe, you have these pieces of paper that are The villagers, you gave me your gold pieces, now not only There maybe, and I'll make it really hard to forge,Īnd I'll put holograms on it, but it'll be denominated as aįive gold-piece bank note. Maybe I'll do it in differentĬolors to show you that these bank notes can come in differentĬolors, but once again, I'll put a famous person Says five gold pieces bank note outstanding. Think you get the point- then I'll have a liability here that Is much larger than it should be relative to 1,000, but I Pieces- I'll do that in another color- that rectangle Piece, you don't want to just have a stack of one gold piece ![]() Why don't you just use this slip of paper? And even more, for one gold Piece, instead of using a gold piece to buy something, Willing to exchange one of these slips of paper for a gold Village, they trust that the Bank of Sal will always be Paper can go back to the Bank of Sal and get back Of paper that I hand you that says, you know what? Anyone who holds this piece of Really hard to forge so that no one else can- I put I sign it Sal and I do all sorts of stuff that makes it ![]() Print and no one else has the sophistication to do something Piece and you get this green piece of paper that only I can In the middle, because it's the Bank of Sal, and it isĭenominated as one gold piece. Look a little familiar to you- says it looksĪbout this shape. Paper, and that slip of paper- and this might start to One gold piece, I will issue a bank note. Note that says you put X amount of gold into my vault. Hey, instead of taking some of your gold out and using thatĪs essentially money, why don't I give you a note, a In my vault, what can they use to transact? Well, the solution is, I say, Pieces are sitting right here on the asset side, or at least And this could kind of be viewedĪs a checking deposit. That they can come and get at any moment. This side is my assets and these are my liabilities, What can they use to transact every day? The way I do it right now. Of the villagers put all of their gold into my vaults, For the liability side of myīalance sheet, I could say 1,000 gold pieces. Mattresses, so they then deposit 1,000 gold And all of the villagers in myĬity, they come and deposit their gold with me, because So they're not going to deposit it back with me. Go to the builders and they're from out of town, Something, but we're going to find out in this video it'sĪctually a much more familiar concept than you ever realized,Īnd you probably have some of these bank notes You've probably heard the wordīefore, maybe in some you Charles Dickens novel or Is an excellent segue into the notion of a bank note. In the banks, what can they used to transact, or toīuy food, or to pay for services, et cetera?" And that Banking videos, I got a comment: "If everyone puts gold ![]()
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