Monthly Archives: December 2014

Part 10: The Profits of Banks

To save is to invest. To invest is to create real physical goods that will help us create more goods in the future. How do we as a society afford to build new investment goods? How do we pay for … Continue reading

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Part 9: Money as Debt

Returning to our goldsmith's balance sheet in our fable: ASSETS: 11000 Gil LIAB.: 10000 Notes EQUITY: 1000 Almost every ounce of Gil in the town has been deposited in his vault. The people now transact their daily business with each … Continue reading

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Part 8: The Birth of Banking

We're going to compress hundreds of years of financial development into a quick story. We sacrifice historical accuracy to cut to the heart of the business. THE GOLDSMITH'S VAULT Mr Smith works lustrous metal into extravagant shapes for those who … Continue reading

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Part 7: Extraction of Information

"Books of business, open on the table, are sometimes no more than notebooks of transactions; a sample extract from one merchant reads: 'Owed ten gulden by a man since Whitsuntide. I forgot his name.' Calculations are made largely in Roman … Continue reading

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