Why Banks Can Lend Out Your Money Ten Times Over
About this video
How does a single £1,000 deposit become £10,000 of spending power in the economy? This video walks through the money multiplier effect step-by-step, using a simple visual ledger to show exactly how banks create money through fractional reserve lending. You'll see who benefits at each stage and what happens when the system breaks down. Chapters: 00:00 The £1,000 That Becomes £10,000 00:16 Follow the Ledger 00:32 The Vault Myth 00:47 Central Bank Confirms 01:03 The 10% Rule 01:18 The Chain Continues 01:34 Central Bank Confirms 01:50 Each Round Shrinks 02:06 The Simple Formula 02:19 Central Bank Confirms 02:35 Creating from nothing 02:51 Money creation by lending 03:07 Who Benefits? 03:22 Reserves Move On 03:38 The Fragile Moment 03:53 The Zombie Concept 04:06 The Ledger Tells the Truth 04:21 A Promise, Not a Vault 04:36 The Next Borrower 04:52 The Fragile Balance 05:08 The Interest Rate Lever 05:24 The Digital Ledger 05:40 The Global Scale 05:56 Your money is a promise Sources & further reading: • Fractional Reserve Banking and the Money Multiplier Made Simple — https://www.youtube.com/watch?v=93_Va7I7Lgg • Fractional Reserve Banking 101 — https://www.lynalden.com/fractional-reserve-banking • Fractional-reserve banking — https://en.wikipedia.org/wiki/Fractional-reserve_banking • Money creation in the modern economy — https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy • Zombie Concepts: The Money Multiplier — https://fedguy.com/zombie-concepts-the-money-multiplier • Understanding the Simple Deposit Multiplier — https://www.sofi.com/learn/content/what-is-a-simple-deposit-multiplier
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