Fractional Reserve Banking

Barter - Commodity - Standard Coinage - Fiat Money - Electronic Money

Gold has been the peoples Money of choice for 5000 years

Money in the Current Economy

Banks Money Supply: Reserves and Fractional Reserves

Banks and Money Supply

Case 1: No Banking System

Case 2 

100 % Reserve Banking

Reserve Banking: Banks dont affect the supply of money

Case 3

Fractional Reserve Banking creates money but not wealth

Money Creation

Money Creation: Fractional Reserve Banking

Fractional Reserve Banking

Deposits of 446 Dollars allow banks to loan 346 Dollars

With Fractional Reserve Banking

Banks make money by charging interest on loans

Banks Major Revenue: Net Interest Income charged on loans

Snapshot

Fractional Reserve Banking: Money 

Barter To Polymer Notes To Banks