Chapter
Understanding Bank Liabilities and the Federal Reserve
35:31 - 38:33 (03:02)
The process of buying and selling involves transferring bank liabilities and cash between parties, ultimately leading to a complex system of promises to pay. Bank accounts and cash are both considered liabilities, with the former being a liability to the banking sector and the latter being a liability to the Federal Reserve.
Clips
Money is the liability of the banking sector and is essentially a promise from a third party that both parties in a transaction accept to close it.
35:31 - 36:41 (01:09)
Summary
Money is the liability of the banking sector and is essentially a promise from a third party that both parties in a transaction accept to close it. It can be created either by the banking sector through bank loans or by the government through reserves.
ChapterUnderstanding Bank Liabilities and the Federal Reserve
Episode#303 – Steve Keen: Marxism, Capitalism, and Economics
PodcastLex Fridman Podcast
Money is a triangular transaction where the price paid by the buyer is transferred to the promises of the seller's bank.
36:41 - 38:33 (01:52)
Summary
Money is a triangular transaction where the price paid by the buyer is transferred to the promises of the seller's bank. This is what distinguishes a monetary economy from a barter economy.