I also want 100 of that.

During normal times in the economy, the Fed tries to control the amount of economic activity that's occuring by targeting the federal funds rate the fed funds rate.

less capital intensive that there's less money that's required

And of course the difference is the money that he had to spend on tax.

So this is lending some cash.

If our earnings are 350,000.

If hundreds of people didn't buy this, we couldn't put it on the market.

It just so happens we got your money, man, plus interest.

It describes it right over here the change in equity, sometime the change in retained earnings, or just change in equity, that is going to be the 200 in net income that the company got over that time period.

Interest is nothing but rent.

The price of money will go down, that's what the federal funds rate is, it's the target rate, so I'll say Fed Funds Rate, it's the target rate that the Fed sets for the overnight borrowing of reserves between banks, that's the Federal Funds Rate, and it will go down and that's how the Fed tries to set the Federal Funds Rate.

In return on equity, the numerator is the net income that we got, so it's 350,000.

Accrued interest will be paid into your account.

So my initial equity is 300 gold pieces.

To make money it is necessary to have money, capital.

No matter how bad it was economically, he always got himself paid.

So this is the treasury yield curve.

That's called paying off the principal.

The least important form of capital, in this project, is financial capital money.

lower the interest rate for people buying and selling dollars, or I should say borrowing and lending dollars, not buying and selling.

Do Low Interest Rates Ensure High Asset Prices?

He paid the loan with interest.

The capital for this plan was prepared.

I met him on the train.

Where am I taking this money out of?

No industry. No capital. Money is worthless.

The company has a capital of 500,000 pounds.

I have 300 gold pieces of reserves

Money lenders are enjoying a profitable period.

That's why we say it compounds.

Let's say they have no interest expense.

Well the first thing that you would do is that you would lower the

Now, who are they accountable to?

A bank lends us money at interest.

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

So just as a review, let's say I'm running some type of a bank and I tell you that I am offering 10 interest that compounds annually.

Now, I think this future will be quite surprising to many people.

The last area is profit itself.

That and money.

That's the interest rate.

The company was started with 100,000 in capital.

Interest. Weekly.

And I'm actually going to initially capitalize this bank with 200 gold pieces.

They just have it around.

So in our example right now, what is our equity?