Impressed that Sam was able to go from nothing to fractional reserve banking in 3 minutes

He nailed some massive concepts in such a simple way

As someone who's been a fan of the channel for a while and working at Wise for almost a decade now, I'm very happy to see us mentioned in a Wendover video.

I've seen a few (ok, maybe just two or three) nutshellish or step-by-step explanations/evolutions of money, but the blender analogy - getting two blenders worth of value out of one value - is the viewpoint that had never occured to me before, thankyou

I kind of love the stock footage of the clay balls. Also, "It sounds like a scam, and maybe it is." Awesome video!

Man. You just explained in 20 minutes everything that took weeks to understand in a high school economics class, and I have way more understanding of the reasoning behind it all! Thank you!

Managing resources and making good returns is not as easy as it seems, there are a lot of things that aren't well taught in schools. The market crisis gave me my first returns, when people stayed away from hard times I made the most of it..many credits goes to Sir Trevor James Beckerman

In Europe we have Sepa (single european payment area). Transfering funds between different member countries is as easy as entering the account number. It also works for foreign currencies without much fees. (Switzerland for example is a member but is not part of the EU) I think that is one of the main reasons why companies like wise and revolut are not very popular here. Our country to country banking works very well actually.

Best Wendover video in a while. All are great but this breaks down an incredibly complex system.

The initial question "how was the value created", you missed that the watermelon grower added fruit credits to the system by growing fruit. All the fruit growers do. But in that specific loan transaction, the melon grower spent 2500 in interest but presumably grew more than 9000 credits worth of watermelons; if she grew only 9k, then when she took in the 7500 loan and paid out 9k she broke even. So let's say she actually grew 10k credits but wouldn't have been able to without the irrigation loan of 7500. Meaning that in that complete transaction, the bank earned 1500 profit, the melon grower earned 1000, and the bank received back the original 7500 loan (it was just playing with other peoples' money here). But the melon grower didn't just put clay balls in the ground and turn on the sprinklers. She had to work. If she replanted last year's seeds, and you live in an area where water is free, she still needs to physically plant, harvest, and bring the melons to market. So one source of the "added value" is her labor. The melon grower is using land. Either she owns it, or she's renting it. Regardless, the space used to grow melon and the fertility of the soil represent a source of value, a resource which can be used to add value to the system. The bank can't operate without the work of people. Someone has to research whether the melon grower is an appropriate borrower, whether the loan purpose is worthwhile, actually offer the loan, do the paperwork, receive the repayment, and do that paperwork, send out the interest payments to depositors, serve those depositors' needs like deposits and withdrawals, etc. All that labor, and the place where the bank is located, represent the same labor and real resources which allow the bank to make that 1500 credits. What I'm getting at is that the labor and real assets represent the source of value-adding. The bank may create phantom money to lend beyond its deposits. In Adam Smith's time it was appropriate to lend no more than 7x your deposits, else you risk a run on the bank. Today, large banks can get away with lending a lot more than that. Lending 0.75x your deposits is laughable. This money-creation through lending is incredibly powerful but it is a risk. As we saw in the melon example, 10,000 real melons actually got created because (a) the bank made a loan available, (2) the bank and the grower were willing to take a risk, and (c) the grower was willing to employ her land and labor to make the melons. If the loan hadn't happened, the grower would have not fully employed their labor and land. So from the macro perspective, money is a government's way to make the economic exchanges happen smoothly, hoping to get all the labor and real assets in the country as fully employed as possible. All the people who labor and earn money can take care of their own needs instead of relying on public or government support. And the more goods are available, the more can be reinvested in improving the productivity of labor and real assets (making next year even more productive), and a surplus can be exported in exchange for additional value. At the micro level you can see this happen with a household's finances. A family with no assets or education can go out and get subsistence-level jobs and then pay rent on a small bad apartment. 1. If they have tons of kids, they can employ those kids in labor. This is what families around the world have done. 2. If one of them works to gain experience on the job, they might be promoted to a higher paying position or negotiate for a better wage because of greater productivity. 3. If one of them can get an education that allows them entry into a higher-paying job, they would be willing to take a loan to get that education. 4. if they buy some materials to make something at home as a small business and sell it for extra money, the limitation is often how much they can spend on the materials, marketing, distribution. Because it's such a small operation, big companies don't want to work with them. And there are inefficiencies to working in such a small scale. But if they can get a small business loan to increase their operation's size, they can maximize their labor input and take advantage of efficiencies of scale. 5. An extended family can come together to share expenses. Instead of the marriage-age / working-age adults always moving out from their parents' home, they could stay on. The elder takes care of the kids, the young adult goes out to work, and in this way the elders are still able to perform valuable labor and the young adults don't have to spend money on out-of-family childcare. This and the next one overlap a bit with the concept of keeping money local, because the more transactions that can happen before the money gets sent out of the community, the more that community benefits from the money. 6. Several households could join together to share skills and burdens. The most common version of this in the US is roommates, where four single people can split the rent on a large dwelling and it's way cheaper for each than if each one rented a studio apartment. They must share common areas and be good neighbors for it to work. And they must rely on each other to pay their respective portions. A more involved version would be four families joining together in a deal where each night one family cooks for all four, and each day each family watches the children of all four, which frees up 75% of the time that would take for each household for those tasks on rotation. The more things like this they can share, the more they all benefit. An even deeper version would be a commune where the households exchange labor without exchanging money, allowing them to benefit from each others' skills and work even though they are too money-poor to be able to ever afford those services and also underemployed meaning their labor would otherwise lie fallow. Heck, just a shared fence line is a sharing of burdens. One fence can be built for 1000 credits, but if it's between two lots then both properties benefit from it, whereas a fence built at the back of a lot that doesn't face anything important only benefits the one side of the fence.

Nice, I would like to see someone attempt a video on how exactly the currency exchange rate of some currency is calculated by tracing the number all the way to who decides or calculates it, and how and why.

Things are a bit strange right now. Inflation is making the US dollar weaker for buying things, but it's getting stronger against other stuff. So, stuff like stocks, houses, crypto, and precious metals aren't doing so great because folks are putting their money into dollars for safety. I'm worried about my $320,000 savings losing value fast. Where should I put my money to keep it safe?

Fun fact, the etymology for 'money' in Korean(돈) is 'to circulate'(돈다). It's just like the word currency, a fancy word for money, sharing its roots with current, as in flow of something. It is kind of cool, because other languages often use the material or the mint it was made for their word root.

As someone who worked on implementing SWIFT for a bank, I can only say it is impressive how detailed your explanation is.

Comes down to the question, where else should I put money besides the financial market? We have a 13% RPI rate so cash is tough

Great video, super helpful, interesting and explanatory. I’m also loving the longer form!

There is a technical layer under this that I find fascinating, I deal with it sometimes as in my day job I work with airline/hotel loyalty currency systems. A lot of these bank systems still run on old mainframe infrastructure that uses nightly batch files, rather than API calls. It's crazy really, and it is what can make it take 24 hours+ to process a transaction. These file formats are so old that they still have special characters in them that relate back to the days of punch cards.

As a non-finance student, this *really* helps me understand just how complex our financial systems are, and for the real need for smarter-than-me finance students... Thanks guys, couldn't be me

No matter how complex the topic or subject, Wendover does such a fantastic job breaking it down.

SWIFT is not some miracle. Sending business payments by bank transfer is still a huge pain for small business owners. I have to supply the company name, the bank address, the local branch address, fill out a form in triplicate, and pay way too much for the privilege.

It would be nice if you also talked about SEPA payment. It's international payment system like SWIFT, but only within EU. Very cheap for the end user, it costs between $0 and $10 depending on your bank policy. But every year more and more banks provide this service for free. Edit: By recent EU regulation, banks are not allowed to charge more than they charge for demestic money transfer. So basically 99% of banks in EU charge less than $0.2 per transfer, most of them charge nothing.

Very interesting video! I was a little bummed that you jumped directly from ERMA to Electronic ACH. But you did, at least, quickly skim over MICR (Magnetic Ink Character Recognotion - also a BofA contribution). And that was my era! I started my illustrious (cough-cough) career as a Proof Machine Operator reading, keying, and encoding checks with little computer-number dollar amouts on the lower right corner of each check. (Yep! That was me!) Dreadfully boring, repetitive job - but it was Entry Level, so I was able to get my foot in the door...

This is (once again) such a great video by Sam. Also, as a temporary expat, Wise is a lifesaver.

What an absolutely INCREDIBLE video!!! This was explained so well, the visuals were both stunning and extremely helpful for understanding. Keep up the great work!

This is amazing! This is the best description of how money works that I have ever seen.

5:17 Interestingly In March 2020 the Federal Reserve set the reserve requirement to 0% in response to a liquidity crunch caused by COVID. It is believed that banks would be able to meet any withdrawals by borrowing money collateralized through high quality assets if necessary.

Absolutely love your videos. Always showing just how incredibly complex everything in our modern world truly is and that we have no idea. Can't wait to see what you cover next.

Holy cow, this was an impressively easy to understand explanation of something insanely complex. Massive props to you and your writer(s). Thanks for such a good explainer, I feel I have a much better understanding of how money works.

You have officially reached a new order of magnitude in terms of the animation complexity, great video

Possibly your best work to date. This is excellent! Explained gradually by introducing a system, presenting a problem then explaining the solution is a phenomenal way to teach.

I highly recommend Hidden Brain's episodes on money, particularly Money 2.0 Emotional Currency it challenges this common idea of where money's value comes from in the first place, as in the explanation at the beginning of this video. It was something I never thought to question until I heard the podcast, but its worth a listen

This is by far the most educational video on banking I’ve ever seen and it’s blowing my mind. Fantastic work!

Maybe we should all start burying our money under the apple tree. That's where I park all my millions of Adsense money.

10:01 can we take a moment and appreciate the rotoscope overlay of a regular door that's been drawn over with a bank vault graphic? Filming the scene, developing the film, drawing over each frame, making new negatives, cutting, splicing, etc. That probably took literal weeks for that little effect.

Fantastic video. Did a great job of explaining money and the way it works, and your examples and metaphors are on point.

This was an amazing video. I'm not sure which I'm more impressed with: 1) explaining a topic I thought I knew but didn't 2) that the fruit trading video was made for this topic or 3) that someone found footage of that exact fruit trading scenario. Stellar job!

I would say the final conclusion is too strict. The global banking system is quite resilient and if someone does make a mistake, there is usually a way to fix it. Otherwise, any bank no matter how small would be able to crash the entire system. Also, consider that creation and destruction are linked, but if I burn a dollar bill nothing much actually happens, therefore a few extra dollars here and there probably also won't create much of a problem.

Great video but it starts with one of the most pernicious myths in economics. The "multi-way trade" myth of barter does not actually represent the historical origin of money. As a system of exchange, barter is a degenerate form of currency that only forms in communities that have already had some exposure to currency (but no longer do, for whatever reason). Pre-currency exchange was always done on debt. In pre-currency communities, if I have apples and you will have oranges, I just give them to you on loan and expect something of relatively equivalent value later; maybe oranges, maybe a service, maybe we forget about it but real life does not operate in clean thought experiments. Currency forms out of this arrangement when we start to quantify the value of things being borrowed (using another commodity good like oxen or grain as a standard unit of measurement, but this good rarely actually changes hands). Once we all start using the same unit of measurement and passing around IOUs (using my IOU from the orange guy to pay for pears), then we have currency. Keynes tried to bust this myth but quieted down when it made him unpopular. Even Adam Smith who popularized the myth of barter would eventually concede that it had no historical basis. Source: Debt by David Graeber

Great video! Really helped me further my understanding of all this stuff!

Great video. I worked in IT for a large UK Nationalised Industry in the 1970's. When we processed the weekly payroll for the manual workers (they were paid cash weekly) part of the process broke down all the payments into all the required notes & coins. These were sent to the company bank branches so that what was required for each location would be withdrawn and then collated at each pay office into individual pay packets every Friday. This was stopped after a few years as all the weekly paid staff were paid by computerised bank transfer. The stat I was told at the time was that as the cash didn't leave the company account until the Friday (pay day) instead of the Wednesday/Thursday this resulted in saving of around £1,000,000 a week just in interest. There was also knock on saving in staff, security costs etc.

Hopefully, this helps people understand the valuable role banks play. Banks "create" wealth as long as the loans are good. If they are bad, it destroys wealth just as fast.

I would say the issue is less about the inherent complexity of moving money. And more about banks using outdated systems and not willing to invest in innovation unless absolutely necessary. It is common knowledge in IT world that many banks still run on mainframes that are 30+ years old and that they are unwilling to migrate to newer systems. Systems which would provide end-users better experience.

In the 1970's my dad's flight instructor took a job flying (In a cargo plane) checks to Los Angeles from the San Francisco Bay Area every night. This was a great gig, then the banks started sending checks digitally and they no longer needed to physicals move the checks. The flight instructor them removed the radar equipment form his plane, removed all of the electronic equipment from the boxes, then replaced the empty boxes where the radar equipment was suppose to go. This gave him a place to put the drugs he was hired to smuggle. An inspector would open the compartments where the radar equipment was suppose to be and see what on the surface looked like radar equipment. There was just one problem. The Cartels had worked out a deal with the police where the cops would look the other way for most of the stuff, but they cops still had to catch smugglers from time to time. So for those flights selected to be busted the cartels would hire a new pilot for this one time use. So the police knew exactly where the drugs were, even though the equipment looked just like a working radar system. So the pilot flipped on the cartel to get himself out of trouble with the police, but got himself into trouble with the cartel. The last my dad heard, he was hiding out in Alaska. But if my dad knew this, likely the cartel had heard this as well....

This is a great video, good work Sam! Keep it up brotha

Great video. I really enjoyed the fruit closed system demonstration in the beginning. However, it can certainly be argued that the claim that the bank makes the net increased money, at 4:30, is incorrect. Instead, it seems that no money is in fact created. The $10k extra came from double counting (bad accounting). It is said, at 3:59, that the 10 individuals have $98.5k. But $10k of that is in the bank. At 4:02, it is said that the bank has $11.5k. But, again, $10k of it belongs to the 10 individuals. Both the 10 individuals and the bank can't simultaneously claim ownership -- thus double counted. If you allowed for it, most of the demonstration is pointless and you can say that it's fair to double count at the moment they put their money into the bank at the start. This of course wasn't easy to see, like many accounting tricks, and the whole exchange was made harder to follow by omitting the tracking of a few non-liquid / less liquid items, namely a $7500 irrigation system and $9000 worth of watermelons. If those are taken into account, it does bring up an interesting point about how creation of new goods (which have higher value than the goods that went into them) generates more overall -- between $1500 and $9000, depending on if it is said that the irrigation system is consumed or not in the process of growing the watermelons. Arguably the true value of the bank is in wealth consolidation to facilitate easier loans. Without the bank, the equivalent set of steps to get the same balances and 🍉 would is much more weird to each investor. Something like "chip in $750 to help buy an irrigation system for this other farmer, and you'll later get $900 in watermelons." Putting your money into the bank, and pretending that you can access it whenever you want, sure does sound nicer (although you have to pay $900 for the watermelons).

There is a very small part of this that I feel needs to be heard and understood by everyone who ever wants to understand anything about economics, and it helps dispel a very simple and overwhelming misconception people have about life as a whole: Your blender example was great. You have 1 blender but you have 2 blenders worth of value. This is actually true with a LOT of things, and it points to the concept that resources are NOT a zero sum game. So many "individualists" start buying into terrible economic and geopolitical theories because they simply make the mistake that because resources are limited, if you benefit then someone else does without, and if someone else benefits then you must, in some way, be losing out on something whether you care about that something or not. While it is true about SOME things, there is so much more of life that it simply isn't.

This just walked me through so many questions I had, thank you!

Great job explaining how money is just a placeholder for something with actual value. That’s why I have such a disdain for theft and why I don’t understand why one would steal outside of pure necessity (I.E. a homeless person stealing food in order to survive). Money is social credit in a sense, saying “I have something of value” or “I did something of value”, such as working at a grocery store. If I work at a grocery store for a week, then at the end of the week they give me money, what the owner of the store is really saying is “you did something of value for me, this money let’s people know that, so someone will do something of value for you in exchange.” So I can go pay my electric bill, and instead of saying “I’m a good citizen, I helped the owner of a grocery store stock shelves for a week!” The electric company doesn’t have to take my word for it, because I can just give them the money. Therefore, if I were to steal someone else’s money and used it to buy something like a flatscreen TV, I would be basically lying, saying I did something of enough value to earn this TV, when really I’m just profiting off of someone else’s work while reaping the benefits for myself. It’s so dishonest and illogical that I just can’t see how people can rationalize it in their brains.

Probably the best Wendover video to date. Excellent and easy to understand explanation of the financial system and how money is moved and value created. Awesome work!

Another way to think of the fractional reserve system is keeping the incoming and outgoing funds separate. In Australia, for example, the capital requirements are 12.5% of highly liquid assets. So in other words, for every $1 in deposits the bank receives it can then lend out $8. It's this mechanism that makes the banks asset books to market cap ratios look so crazy (often assets are 8-10+ times their market caps) - most of these are loans repayable to the bank, so the majority of this asset book is principal the bank has already lost (via loaning to customers) and needs to recoup just to break even.

This is one the best explanations on how transactional banking works, it oversimplifies a bit but captures most of the implications of each process,

Mate I can't believe how approachable and understandable you made this subject. Even I could follow along and get the gist of it.

This is insanely complicated and well made, amazing job

This is the first video explaining Fractional Reserve that I have seen which is not written from the perspective of a Libertarian Gold Bug. For contrast, see "Money as Debt" (which is a fun view). Thank you!

I loved the game-like explanation. But I saw the money being created in the market, not the bank. Eg: the first clay ball that was created was when a person traded an apple for a fruit credit. The bank didn't create anything. The people only had 9000 credits each, not 10000. The bank *supposedly* had their remaining 1000 credits, but actually didn't, since it assumed the people wouldn't all want to withdraw all their credits at the same time. So the money that existed was just that that remained in the bank after the loan was given. No money was created there.

Great video, thanks for modling the community scene, I built this model once in my mind and it was rally hard to imagine, you made things easy for me now. But, I guess that money wasn't created out of thin air and also it wasn't created within the bank, the real creation of the money came from selling the harvested crops at the market, the agricultrual activity is the reason for the new value created.

I've always thought that value was added to the system through primary production. We dig up minerals from the ground and the sun making crops grow, and these add money into the system.

This video hits all the points almost perfectly: Coincidence of Wants, Fractional Reserve Banking, Cheques (Checks in US), Swift payment orders. Now, more than ever, money has become as virtual as one can imagine, yet still having the same purpose: buying and selling stuff. Best videk yet!

Wendover, Ive been a several year follower of ur work. I would wager that THIS is one of your most beneficial videos to the average Joe regarding understanding money distribution. It's a video people don't realize they need to watch

4:51 That’s a nice way of explaining this, I’ll need to remember that one 😀

Love this video. Sam actually nailed some massive concepts in such a simple way that explains both the complexity and vitality of the modern banking system

I am genuinely amazed by this video and even I learned new things - I used to work in an international bank that prides itself for payments for 6 years.

According to certain economists, it's possible that the U.S. and certain parts of Europe might experience a recession at some point in 2023. Although a global recession, which is characterized by a decline in annual global per capita income, is relatively uncommon due to the faster growth rates of emerging markets like China, in comparison to developed economies. I have pulled out more than $340k from my bank. After all, the FDIC covers only up to $250,000, and the implosion could have bad effect. Looking to invest into the stock market now. Does anyone know how I could go about it?

$btc fixes this. A fully decentralized, peer-to-peer network is unstoppable. Crypto is inevitable & shouldn't be controlled politically as the case of CBDCs

I wish this was a series! Thanks a lot, greatly done

Speaking as financial professional, I must say Sam is just excellent at conceptually presenting the money market in an approachable and easy to understand manner.

This is one of the most informative videos I've ever watched on UKposts. An all time fave.

This is an amazing history of banking, especially in the USA. I love it! 10:20 When that check flipped around and I caught a glimpse of the back with all of those endorsements, I knew it was gonna be a long routing! FYI, some of your video could use de-interlacing.

In my opinion, it’s always good to have more payment options. It would be great to have a good balance between cash, digital (online transactions) and cards and not rely on one too much.

The first example is wrong. At the end the 10 individuals have 8100*9 + 15600 = 88500, not 98500. Adding bank's 11500, it's still 100,000. The author says "they each (9 out of 10, to be exact) have 9100 which 1000 is sitting in the bank", this statement is correct. But, if you want to count them as having 9100 in the calculation (as he did) , the bank no longer actually has 11500, because 10x1000 of the money is these individuals'. He's basically double counting this amount, which gives "10k out of thin air".

Easily THE BEST explanation of banking history and systems I have ever seen! Thank you!!!

It's crazy how well made those videos are

At 6:38, I learned that 1975 was actually between 1871 and 1879.

The Automated Clearing House (ACH) is a private organization driven by contract called the ACH Rules. While the Federal Reserve does participate as an operator and regulator, the ACH network is operated by it's members and governed by an organization called NACHA. When the US Government switched from issuing checks to ACH transactions, it required financial institutions agree to be bound by the ACH rules before their account holders could receive government payments.

Such valuable information. Thankyou!

Didn't see learning about Global banking and better understanding monetary markets on my Sunday todo list but glad that it appeared. THIS VIDEO PROVIDED SO MUCH CLARITY.

Really really interesting. I was thinking that the excess value created at the beginning came from the outside of the closed loop through the addition of the irrigation system that the loan procured. Which, in a sense it does I suppose, but not in the strict accounting sense that makes the system work.

This is really good. I work exactly in this industry and you found a way to really simply explain the history of payments. It's so perfect that I will use it to share with newcomers on the job :) . Just if you would have explained the two cycles of bank to customer and bank to bank payments a bit more (MT1xx vs MT2xx or in ISO20022 pain and pacs) it would have been even better(but I guess I am asking to much here) . Also if you are already on the payment topic, maybe making a video about target2 clearing.. That has also an interesting history ;)

Such a complex system explained this simply! Love it!!!

This is an amazing video that deserves more likes. I wish I could subscribe twice. Excellent work!

It's videos like these why I'm always excited when I see a new Wendover productions video in my recommended section.

0:59 “… then it all starts to get just a little bit …” Me: “…bananas?” “… complicated.” Me: “damn.”

At any one time, a local bank is likely to have $100-250K on hand. They will move about $500K-$1.5M worth of money that day as people come to deposit and withdraw money. You have to remember that businesses also use banks so they tend to deposit a lot while people withdraw a lot. It generally balances out to more cash/money in the bank than our daily.

Sam this was legitimately awesome, I had an economics class in high school and didn't know anything from what you said, yet I understood everything, cheers to your writers and you for how comprehensive and fun this video on a very slogish dense topic is

This was so fascinating and helped conceptualize the financial systems that have always seemed so unbelievably complex to me but never knowing why.

Thanks! Your channel is very interesting and informative.

just wow!! :O best explanation of money and banking I've ever seen! So factual, understandable, and positively neutral. Not loading it with personal interpretations and agenda! keep it up! :D

Such an informative video, never knew how all of this works but always wanted to.

The example of when the money appeared is wrong. Value is not created at the time the loan is handed out. The value is created by the fruit of the farmer's labor (eg, with that loan, it's not till they create more watermelons and bring them into the world did value get created). This line of thinking is how we time and time again end up in financial issues because the finance world, value is not created in a vacuum, despite them thinking it is. If the farmer never creates said watermelons and defaults on their loan, that value is gone and realized as a loss (the value only appears on pen and paper, at the time of the loan, not accounting that it's very often not a sure thing). It's how every dozen years or so, banks start handing out garbage loans and then when the loans default, they get a slap on the wrist and crack down until they loosen up and repeat the cycle. Financial institutions do assist in value generation, it just doesn't create value.

I only recently found out that some 86-90% of ALL TRANSACTIONS ON EARTH are done in USD. Even in your own country outside of the US. Most businesses even in the EU buy in USD. So when the USD value falls or rises, most of the World is affected, as opposed to when a single country's currency changes.

that machine at 13:43 (analogue signature copyer or sth) looks awesome! its a crazy circumstance in wich you need it but it looks awesome! (I would use a stamp and not a signature but hey now we dont need either)

That was epic. That was the best explanation of what currency is and how it came to be, ever! Sterling Job.

You should make a video about the brazilian banking system, how they moved money fast enough to beat daily inflation in the 80s, and how they have today an universal, instant digital transfer of money between all banks in the country

What really make fractional reserve so great is that most of the money goes to other bank accounts. You deposit 100 and they loan 90 for a home loan, that person buys the house and the seller deposits 90. The bank then loans out 81 on a credit account, used to buy groceries. The grocer deposits the 81 and the bank now loans out ~72 etc. You deposit a fresh 100, and the banking system can make nearly 1000 out if it.

Wendover is my favorite channel and I’ve watched all your videos. Sam, I think this is the best one you’ve ever done. Bravo!

Amazing video. Love the 20 minutes format

When I watch Wendover Productions explain things so concisely it makes me bitter at how bad every other teacher on any other topic is at their job.

What an absolutely phenomenal opening metaphor. Gosh, that got right to the heart of everything going on

This was a great explainer, I always wondered about why transfers took so long. Seemed unreasonable for a digital process

You say that SWIFT members can fulfill international transactions without actually moving money (15:35) . This isn't completely true. They may not have to move money immediately but they have to move money at some point when they rebalance their Nostro-vostro accounts. It's similar to your earlier example of moving gold across the basement of the correspondent bank (9:14). The more one way the flow of money the more often the rebalance has to happen. The smaller the size of the Nostro/Vostro account the more often the rebalance has to happen. Physical money has to move at some point.