Friday Fun Video: Learn About Banking

How is our banking system set up? How do banks make money? These are questions that many people ask. The good news is that there are answers. And, thanks to modern technology, you can see it illustrated on a video:

I really thought the assertion in the video that gold is pretty much useless in reality was interesting. It’s really all about perception, and what society decides to value as a whole. And thousands of years ago, society decided to value gold. But, in the end, the worth of anything is what we agree it is when it comes to making an exchange. That’s pretty much how any exchange — from stocks to commodities to currencies — works. In the end, our entire system of finances, monetary exchange and value for goods and services is built on perception of value and worth.

It also reminds of a great passage in the Terry Pratchett book, Making Money. He explains that gold is basically pointless. It’s nice to look at, but if you’re on a desert island, you’d much rather have apples. Those you can eat.