How do banks make $$$$$$$$$$$$$$$$?

1
How do banks make ?
2
Open Discussion

• What is a bank?
• How do they make money?

3
Historical Functions

• Safehouse
• Reserves
• The invention of the loan
• Most important discovery of mankindLeverage

4
Modern Era Banking

• Fractional Reserves
• August 15, 1971
• Paper money
• Electronic money
• Online banking

5
How do banks profit?

• What normal people should understand
• Fees
• Interest
• What normal people are not expected to
  understand
• Secondary Market
• Leverage
• Derivative Markets 592 trillion, as of Dec.
  2008
• Sourcehttp//www.bis.org/statistics/otcder/dt1920
  a.pdf
• How much is a trillion dollars?

6
How rich are the richest people in the world?
Source http//www.forbes.com/2009/03/11/worlds-ri
chest-people-billionaires-2009-billionaires_land.h
tml
7
How about the wealth of the world?

• Gross Domestic Product
• GDP for the world in 2008
• Source http//siteresources.worldbank.org/DATASTA
  TISTICS/Resources/GDP.pdf

60,115,459,000,000
8
Total Estimated Wealth of the World.

• World GDP 60 Trillion
• World Real Estate 75 Trillion
• Worlds Stocks Bonds 100 Trillion
• Total Estimate Wealth of the World
• 235 Trillion
• So, where did the 592 trillion in the
  derivatives market come from?

9
What do you think?

• The current financial system needs to be tweaked
  and fixed, but otherwise is the best system to
  guarantee economic prosperity.
• OR
• The current financial system is broken and a
  completely different financial system needs to be
  put in place to guarantee economic prosperity.

10
Tweaked

• Keep fiat money
• Keep Federal Reserve System
• Keep derivative markets
• Conduct research on our current system and ideas
  of how to fix it. Use the internet for your
  research.

11
Replaced

• Alternatives
• Modified gold system
• Etc.
• Use internet to conduct research on alternatives
  to todays fiat, centralized, financial system.