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

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

If some wants to invest in a fund the fund will sell them the share so they're always dealing with the fund itself in a closed end fund once the fund is created it's share pool is fixed and if someone wants to buy or sell a share it happens in the secondary market so they're buying and selling from each other they're not dealing with the actual fund manager

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

So 10 of 110 is 11.

The person who runs it nicely describes it as

I'll open a bank account.

I have a fairly wealthy village.

He deposited the prize money in the bank.

I just give them a checking account.

You know, about my money.

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

And we covered that a couple of videos ago.

And we went the fractional reserve route.

I want to deposit some money.

I trusted him with the money.

So what would be total demand liabilities?

Grandfather, the clinic, the foundation,

That's what I'm going to talk about here

I have a lot of money in my savings account.

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.

So this is the account of B. The account of Villager B.

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.

The bank keeps money for people.

He left his safe in my care.

Deposits on long term leases.

I entrusted my money to him.

And then instead of giving them actual gold,

So how much could I expand my balance sheet?

Let's continue with the story of

So what happens?

He has plenty of money in the bank.

I have 100 in terms of the building itself.

So how can we do that?

There is a reserve requirement.

Let me do that I'll do that in purple. These are checking accounts or notes deposit accounts for people.

Good morning, Melvin. Here's the money.

I put the money in a three year time deposit at the bank.

But it's the same idea.

I have 300 gold pieces of reserves

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

The advantage is this fund manager doesn't have to keep cash around in case the share holders want to redeem

Take a look at these.

We opened today.

I mean, I could even have a denomination that's it could be a 500 gold piece.