What is Money?

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Information What is Money?

Title	:	What is Money?
Lasting	:	25.31
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Views	:	43 rb

I am getting some questions on this along the lines of "But doesn't interest throw this system out of balance?"brbrThe answer to that is no - the Central Bank charges interest on the loans it makes, but it also PAYS interest daily to the banks which are holding money - so interest balances outbrbrMore generally, interest can never unbalance the system as a whole - it is merely a transfer from one group of people (debtors) to another group of people (creditors)brbrHope that helps
Comment from : Garys Economics

So, how do central banks create money?
Comment from : HeereAndQueer_ AndPeggy

if central banks cant give money out only load it, what about covid stimulation /
Comment from : Lee sarson

Okay so central banks, in America the fed, are the only places that can create money but they can only loan it out to smaller banks This means that the banks have to pay that money back to the fed? But I'm assuming they don't pay any interest on the loan from the fed? Because if a small bank gives you a loan you typically have to pay back the loan plus interest and that's how banks make money right? brbrI'm unclear on the purpose of distinguishing between the fed loaning money vs giving out money bc a loan is supposed to be paid back So in what part of the system does money go back to the fed?
Comment from : Green Elf Alchemy & Botanicals

So what about all the money that's been created and is still being created by the crypto currency market?brIf I buy a crypto currency for 1000 pounds and I'm a month it rises to a value of 50000 pounds and I sell it I've just created 49000 pounds for nothing No debt no work nothing So in theory and in practice I have just created 49000 pounds out of thin air And this kind of thing is happening everywhere all the time Or am I missing something?
Comment from : Lively Consciousness

As a Uber driver I listen to you video's while taking passengers so we can wake the masses up
Comment from : Queen

This was a very lucid presentation Better than any class I've taken, or book I've read I'd love to see a video show us a pound flow through the national accounts Not sure if you're interested in that level of detail
Comment from : John Szabo

Love how Gary puts it everything in such a way we can all understand The rich are getting richer and were in cost of rich crisis
Comment from : martin robinson

Wow, first video by this Guy I have watched and I already know I am going to binge watch this content
Comment from : Graham Pearce

Reserve Banks "Print" money
Comment from : altGoolam

What is money 'can be easily be understood by basic double entry book keeping ,every debt has a credit ' asset and liabilities of balance sheet what you owe/own
Comment from : Brian Price

Doesn’t this only work in a closed system/economy? Some of (probably a lot) would have gone to purchasing goods and services internationally such as from China etc, so much of that 700bn isn’t going to be sitting with people in the British economy
Comment from : Josh Unwin

How does fractional reserve banking figure into all this?
Comment from : Santiago Perez

Are you sure that money is a zero sum game? There is more currency in circulation than there is actual money (Gold, and silver)
Comment from : Keifer

Thank you for your brilliant explanations I have been looking for this level of communication for a long time I think a lot of people are yearning for real understanding which calls out our politicians and shows them (not all of course) to be ignorant and themselves easily manipulated by lack of understanding We need real knowledge and informed non-ideologues, moral leaders with brave and radical ideas Please continue to educate us and especially the Labour party
Comment from : Patricia Askew

You say that it’s fact that debt equals the amount of money in existence This is totally untrue by two factors 1 Interest paid back and 2 The ability for private banks to lend out deposits that of which has come from lent out money
Comment from : thomas owen

20:00
Comment from : Aidan Thompson

8:50
Comment from : Aidan Thompson

Only after 65 years have I realised that my attitude to money has been confirmed by you as being factual GarybrI really think if young entrepreneurs were aware of this, they wouldn’t be so hesitant in starting a business
Comment from : Fibre Washer

I think you missed 2 things on commercial banks: 1) fractional reserve lending and how that impacts what you said about them having to have the money when you take it out and 2) I'm not sure the bank does need to have the cash available for you to take it out, they just need to have the relevant fractional reserve currency? Is that right? Same point in 2 ways I guess
Comment from : Ryan Adams

"Basically the central bank can lend money and that brings interest rates down, but the government can give money and that causes cash accumulation"brSo when the government goes £700 billion into debt, the system always balances, so society must have gained £700 billion So the question is who accumulated that wealth? I certainly didn't gain £14,000 and nor did anyone I know I think Gary's answer is: the super rich
Comment from : Teds

False Money is being transferred from the borrower to the creditor because of interest payments If we could get loans for 0 that would be true But the often you have to pay up to 20 interest on your debt This is how the elite steals from us have a lovely day ❤
Comment from : moerpphaayy

Money is debt
Comment from : delfim oliveira

So by this logic the best way to solve inequality would for the government to run massive surpluses and to eliminate it's debt But all common sense says to me that this would annihilate public services and redistribution of wealth via benefits How would that lead to improving equality brbrAlso how do "the rich" simultaneously pass their wealth to the government to fund debt whilst buying all the assets and driving up their prices?brbrSo I think I can see the logical fallacies in this argument But I am not smart enough to know how you correct what Gary has said to reach a more accurate understanding
Comment from : Paul Legend

Underated channel As someone who came from hardship and managed with a lotta luck, and a heap of hard work to get out I appreciate a voice like yours I see the imbalances, and its very real, and it feeds off itself
Comment from : nCr=odds

When I compare Gary to guys like Robert Kiyosaki (who talks like he wants to educate people on money but really is after their money), there is no comparison for the level of value provided
Comment from : Mark Hallam

Brilliant !
Comment from : Traoré René

Thanks, i have been using your videos to help covince my family that their veiw of money and society needs to change brbrHaving someone who seems relatively genuine making better points than im making is great Cheers
Comment from : Markys Bike Lab

Money is a token you use to buy your resources
Comment from : carlosedwin1

🤓🤓🤓you rock Gary Thanks again
Comment from : Robert Williams

It’s a claim on energy a measure of resources
Comment from : Leighton Watkins

These education breakdowns are invaluable It’d be interesting to hear gary look at other alternative financial systems and discuss the pros and cons aswell as how we can make the current system here work more equitably
Comment from : -wordsmith ourselves 2 wellness

You can't talk about this issue with much credibility if you keep talking about the paper we exchange with each other as money It is not money! It is currency, and those that don't learn this distinction are doomed to failure at some future point in life
Comment from : Joel

This is so bad and so wrong on so many levels I just don’t know where to begin and am totally speechless
Comment from : THE OTHER SIDE AUSTRALIA

your party wrong , there are two types of curency, one is digital and created by banks when they make loans, the other is created by the central banks, its this duality of curency that creates confusion, its not one thing, of course neither are money i have a sovereighn at home its worth a weeks wages in 1856 it still is because its money, its a perminant store of wealth
Comment from : Robert Allen

I thought money was also a means to exchange value, I guess this is where it can be manipulated by those in the knowhow If money was purely issued by computers the element of human greed could be removed Its also the human decisions made by so called governments that diverts money away from where it is needed Perhaps the government should be computerised too?🤔
Comment from : Marty the H

💎💎💎
Comment from : Acesiz Official

What is meant by the Fiat system in ecomoics please?
Comment from : Catherine Poustie

Bankers are grifters especially the top ones Why is anyone listening to this stuff? Money is not debt It is an invention used to allocate resources It isn't going to work flawlessly but it's the way that it is Make yourself valuable as an individual and you will get the magic coupons to buy stuff House prices is really a London thing His solution is basically voting for labour He is also against crypto the only thing that has happened in the last few years where ordinary people are making wealth out of nothing What the elite have done
Comment from : Ianto

A 700 billion quid giveaway is a bad thing for the average person in the UK however the 7 trillion dollar wealth transfer that’s taken place in the US is devastating for the poor and middle class
Comment from : DanJ

Hi Gary I work for a large charity Could you talk about the economics of charity? People give - after tax Employees of charities earn salaries - and pay Tex If they choose to give, it also goes to a charity with a payroll Gift aid is the token we are offered by HMRC But the whole thing feels suspect to me especially when you consider many charities patch up holes left by failures of government How does all this work??
Comment from : ritcha02

Does anyone know how much of the £700bn has ended up in the coffers of big corporations? We’re all aware of the obscene profits made by the fossil fuel giants, but I guess other large companies have also accumulated big sums And, I assume, that there are huge amounts which have been shifted out of the UK economy via tax havens
Comment from : Mark Norman

And this is why austerity is nothing but ideological bullshit designed to siphon wealth from those at the botto to the top
Comment from : Alberto García

Just making sure I understand this right When you say society can't run out of money, presumably you mean global society? In which case, our government could run out of money just as an individual person could run out of money?
Comment from : notgodzod

People don’t “think” about money because it’s intertwined with basic survival needs In addition, as a collective, we are not taught about money…you either have it or you don’t and that is often generational inheritance based on class Money and economics is a construct created by a few people and it’s convoluted because it’s a game of power…perfectly designed to confuse people Appreciate your desire to explain this, but not sure how this is going to solve the imbalance of power Holla Our economic situation as a people is connected to our psycho-spiritual lack and profound disconnect from the natural world My hope is that our species ability to heal profoundly will eventually re-structure that which we call the economy into a fairer distribution of resources and wealth/power being something much deeper and compassionate than material possessions and inherited status
Comment from : All To Love TV

God bless you Gary building 7 😎🐭
Comment from : Jack Blue

What you are giving a good explanation of is the Fiat Monetary System, which is not the same thing as 'Money' There have been many forms of money over the history of humanity and Fiat systems have always been exploited and resulted in boom and bust cycles and, eventually collapse brbrThe reason that we have wealthy grifters in government and the financial system is that they know about the Cantillon effect and the Fiat Monetary System makes running those money printers absolutely irresistible so they'll do it for as long as they can get away with it
Comment from : GleefulKate

@garyseconomics is there any hope?
Comment from : oliver honeywill

Energy hasn't run out, it's being slowed down by the company to supply the people to raise the price
Comment from : Suzanne E English hypnotherapist

Interesting video, thanks I guess it's kind of like how the universe works where the total net amount of information can never be lost But from my low level understanding, I have to ask the question that doesn't the global economy come in to it somehow too? Like can't money be lost from the UK economy if money from here is paid in to other countries economies eg ordinary people buying from another countries shops, or a resident of another country coming here to work temporarily and sending money back to their home country?
Comment from : mhtbfecsq1

So distracted by the presence of Louis Theroux
Comment from : Alex C

"We can both use the same £1000" (1355) I don't think so
Comment from : Philip Spencer

Credit has a lower interest rate than debt
Comment from : Get Real

it's kind of a long winded version of the explanation I usually give peoplebrbrMoney is both conceptual and consensual It exists because we all consent to it existing It has no inherent value in itself without our mutual consent It exists because we believe it exists It relies on us believing in it Kind of like God It's value requires our mutual consent Which is why, ultimately, there is no money
Comment from : Simon Attwood

Thanks Gary for breaking this down, I wish we teach financial concepts with such clarity in our school years to make financially literate citizens All we learn is, work hard to get good grades, work hard to get good job but we miss some very essential concepts of money, how it can work for you and how you should handle it
Comment from : Debashish Sarkar

Mate I fucking hate this shit what the fuck You’re doing a great job, but this shit is fucking wank 😂😂😂
Comment from : Jack Martin

Good video Just out of interest, what is the benefit if the government giving billions of pounds to the rich to drive, there assets up which makes The cost of living go up?
Comment from : LPD Leoni

Thanks Gary for sharing this video Criminal the education system does not teach this in our schools how much you can learn just for 15 minutes of your video 👍🏽
Comment from : LPD Leoni

A fully planned transfer
Comment from : Winston Smith

Gary, what about money that moves in and out of the country?
Comment from : Skyline UK

Interesting thought experiment a group of us board a spaceship to colonise a distant earth like planet light years away We arrive there, we have people who can fish, people who will grow food, people who can build houses, people who can make boats, clothes, shoes etc people to run shops, provide services and so forth However it won't work if the person who has caught fish needs to exchange them for shoes but the cobbler doesn't want fish We will need money in our society to make it work, we will have to find someone to be a banker and 'create money'? How would it work if we were starting from scratch? we now have no connection to any money or banks on the planet we came from?
Comment from : Richard Banner

If people don't like to be in debt, all they need to do is not take on loans Cars and House prices reflect only the amount of debt that people generally are willing to allow themselves to sink in to If enough people stopped taking loans, prices would decrease
Comment from : sirkastic

Brilliant! This is the most simple and clear explanation I have ever heard and now I feel better informed Thank you Gary 👊
Comment from : Steve Rogers

The Bank of England said in March 2014 private banks create money when they make a loan The power of private banks was given to them by the Bank Charter act of 1844
Comment from : Scout Johnson

Your questioner was very quiet Gary You had all the biscuits too
Comment from : mickey b

Top bloke Liz truss sent me here
Comment from : Mick Kelly

I like Gary's definition of money as the commodity we use to determine the distribution of all other commodities But, I would expand on this Consider that human society is not possible without the real material goods & services (commodities) required for it to function, and we currently have a capitalist & profit-driven political economic system So, I would flip Gary's definition on it's head and say money is also how we determine where to allocate labor in production as well I think both of these are true about the role of money in our current society, but one aspect might be more relevant than the other depending on the perspective of your analysis brbr(I am very deliberately restricting this analysis to how money works within our current capitalist political economy as that's what is the most relevant to us and all of these definitions above break down once you try to apply them to a transhistorical definition of money)brbrAnyway, I'm a big nerd that started reading Marxian, MMT, & econophysics books/papers almost 2 decades ago out of frustration with how divorced from reality mainstream economics is I really appreciate Gary's commentary as he is able to cut directly through both the fake mathism of mainstream econ and liberal moralist bullshit around money/debt and clearly explain how our current day economic system really works Keep it up!
Comment from : Twubbles 29

I've heard people and economists (Yanis Varoufakis in 'Talking to my daughter about the economy') describe that when banks lend money in a loan, they credit an account digitally but don't necessarily need to actually have all the money in reserve as often people won't actually withdraw all the loan Thereby 'creating' money out of nothing Can someone explain how this fits into the picture that Gary is describing in the video to a non-economist like me please? Thank you in advance
Comment from : punkomattic89

Can anyone help me understand the role that other currencies play? If a load of British government debt was used to buy vaccine from phizer why doesn't that mean that a load of the 700 billion is in America?
Comment from : forest trees

All schools tried to teach me were obedience and conformity Also, I was taught the dimensions of a WWII trench for some bizarre reason! That's why the British lower classes are right-wing, flag shaggers
Comment from : Grrr!

Really interesting! I did my PhD on money and debt-I’d recommend David Graeber’s debt book and follow Dr Dirk Ehnts and Prof Steve Keen for a really great understanding of money I think the word ‘money’ is problematic-we really need more words to describe the different aspects of money-like the many Inuit words for snow!!
Comment from : Martina McAuley

Thanks for this I've always tried to describe that essentially money at a basic level, is only a measurement of distribution of available resources brIt is solely a means of deciding who has earned what share of the resources brbrTherefore, money as a system is obviously currently failing
Comment from : R Bain

Please can you make a vid explaining the ftse 100 & 250 ?
Comment from : Boston Lincolnshire

Gary, have you heard of the positive money campaign? They want to change money from something created as debt into something created and spent into the economy Would be interesting to hear your take on it
Comment from : deadlylampshade

Gary a quick question This video is excellent and very informative Your explanation suggests to me that this makes complete sense if the currency remains within the borders of the issuing nation Where does this principle sit when for example an unknown amount of sterling printed by the BoE is distributed through banks to individuals who take sterling out the UK overseas For example during furlough a loan is given to for example a Bulgarian builder who takes this money back to Bulgaria The loan for whatever reason is never repaid, the builder in this example never returns to the UK Does this now become part of the national debt?
Comment from : Dave Saunders

Maybe it’s covered in the second half of this boring video, but what about the differential between interest and inflation?
Comment from : Peter Griffiths

Is that Louis Theroux you are chatting with?
Comment from : Daniel Barham

Accounting for charging interest, if all debt is paid back is there not a negative amount of money?
Comment from : Emilia Schmolck

Excellent presentation of basics Thanks, Gary
Comment from : Reg Hand

From my understanding it added up to zero until the central bank printed even more money to fund furlough and put the government and the ordinary people in debt so what was zero was added to by the central bank Therefore the price of things has gone up (inflation) so things cost more to accommodate the increased volume of cash for the same assets Therefore because they cost more, poorer people can’t afford them So as you were saying to balance the books that 700 billion needs to paid back to the central bank brA capitalist society is never going to punish and take it back from the rich, always the poorbrJust to add also, this is not the first time that they have just printed more money knowing what it meant
Comment from : Paul Staines