So he doesn't quite have 100,000.

over the total amount of

Now, the first entrepreneur, he's very conservative and he's been saving all his whole life to do this.

I can just create a checking account for Entrepreneur C.

this was the official version

He's my donor.

So you already see this discrepancy.

I just give them a checking account.

And I know many of you, your gut reaction is to say, gold.

Why did you pick him? Because he was handy and would come cheap.

Checking,savings took out about 125,000 in cash.

Those are some pretty hefty deposits for somebody not really working.

So you have your Federal Reserve as the Central Bank in the United States, it's quasi independent, but it's been given the right to print money.

When you put money in the bank, you deposit it.

So 10 of 110 is 11.

In a traditional mortgage, you actually, your payment has some part interest and some part principal.

He deposited the prize money in the bank.

The money rests in a safe at the bank.

Scarlett's deposits.

So what I do is, I take their 900 gold pieces, and I take it as a deposit.

Everybody knows, you should absolutely not work with your spouse.

This is actually the power of compounding interest.

Well, no. Because then a bank take on arbitrary amounts of risk and there are regulations, although I think a bank would do it on their own to some degree, but there're regulations called reserve requirements that tell us how much lending can a bank do relative to its actual reserves. In this case, it's reserves of gold.

And let's say that I can, in the bank,

I'll open a bank account.

I have a fairly wealthy village.

I actually have very little cash in my wallet right now, if any of you are thinking of mugging me.

We borrowed money at high interest.

I want to deposit some money.

They use online attacks to make lots of money, and lots and lots of it.

Was the money actually paid?

But it's the same idea.

And now this guy says, look, the scheme is legitimate.

That's 100 , right?

That would be total bank notes in this case and bank notes are also something we'll later leave a world where every bank is issuing bank notes, but I just wanted to give you that kind of historical context, how bank notes even started off.

You know, about my money.

And I think something happened, right? He put aside a little cash for you.

It's in a safety deposit box.

So that's what the buy side is.

I could've actually issued bank notes, same idea.

And of course, these people benefit because they get safekeeping for their accounts and their money is actually growing.

I have a lot of money in my savings account.

This isn't 10,000, it's the local currency.

The bank keeps money for people.

This factory here, it's actually making something useful.