So we could say, well, a new figure comes out ... let's see African debt.

Gobble, gobble, gobble, gobble, gobble.

So over here you had another liability.

Most times the liabilities are pretty easy to get a handle on.

So now I have this liability.

I will try to do proportional to the size so that right over there, that is the accounts payable the five thousand dollars. they both have that on the liability size now where they really diverge so this is the same amount 5 thousand dollars it should be about 1 4 of the size its not exactly how I've drawn it but where they really diverge is that Jason

And let's say that's all of their liabilities.

So liabilities. Liabilities.

Let's say assets and I'll talk about margin requirements

This is the angel investor, and this is all of us down here, and all of this is equity.

Even if it were able to offload these loans, it still does not have enough money to satisfy all of the demand deposits or all of the liabilities.

So what you do is you have, let's say, the 6 million.

liabilities.

And then we have the debt, the debt of the company, or the

Let's think about its liabilities.

That means that you've increased your Accounts Payable by 100.

So let's say these are debt holders right here.

I owe the bank 750,000.

And they got an asset called loan to Bank A.

And then we have a little bit of cash on top of that.

This is 120,000 in equity, market value of equity, he has another 105,000 in liabilites.

This was equity.

What I could do is maybe 100 of it,

It is estimated that his debts will amount to a considerable sum.

So you have an Accounts Payable liability of 100 sorry, at this point we had no Accounts Payable liability and then after the end of the month we have an Accounts Payable liability of 100.

liabilities as well.

It had 5 million of debt.

What are my liabilities?

That assets, A for assets, is equal to

Or the other way to view it is, assets minus liabilities is equal to equity, right?

These are deposits that I owe to people.

For the liability side of my balance sheet

That we'll just put generally as liability.

Now no matter what, this company cannot go bankrupt.

Before Quantity Money

After Quantity Money

What we did in this examples is that the bank every time it made a loan, it just made a loan and that created an asset and then it had a corresponding liability where the liability was either a checking account that the entrepreneur could use or bank notes which are essentially cash that the entrepreneur could use to pay their laborers or to buy their land or whatever they needed to do.

Minus 1.075 that was the max that I could borrow

Everything on the right hand side is equity, so this is all equity.

I still owe 750,000 to bank.

So my liabilities I owe the bank 750,000.

An even bigger picture, if I now look at my balance sheet, what are my liabilities now?

This is the equity...

I have 300 in total demand deposits.

Well, its assets are let's see one plus 21, 25, 26 billion in assets and its liabilities are 23 billion.