A Look at How Banks Make Money

If you are interested in how banks make money, and how our banking system works, this is an interesting video. It goes through how banking came about, as well as how the whole system works so that banks make money while providing a service to society.

It’s an interesting video, and one of the most controversial things (in some opinions) that the video maker says is that gold is basically useless. He points that, practically speaking, gold really doesn’t have any more value than the paper money that we use. The difference is that thousands of years ago society decided that it was valuable.

This is an important distinction when it comes to value, and how you spend your money. In the end, something only has value that is agreed upon. If enough people don’t agree that something should be priced high, they don’t buy it, and the merchant has to lower the price to something that a majority of society agrees on. And this is how it works with nearly everything. In real terms, everything from stocks to bonds to gold and other commodities to currencies to the coffee you bought this morning, has a certain value because we’ve agreed that it has.