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Economics 101 - no big words, just globalisation and understanding

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Hello beautiful human beings, I'm Sam McPherson, this here is Dee. We're just going to run through bit of a thing about economics and see if we can draw some conclusions on it and make some understandings, so... Dee, I am the world bank, all the world banks. You're all the world's people, alright? Ok then, cool. So, say you wanna buy a house... Ok. Now the houses are really cheap, because it’s a long time ago. So a house is only going to cost 2 dollars. Ok. But in order for me to give you this 2 dollars you're going to have to pay something called interest, which means that eventually you're going to have to give me back 2 dollars and 10 cents. Ok. Is that fair? Because I'm giving you money for free. Well, almost for free. So, in exchange, you have to give me just a little bit more back, is that fair? Aha. Ok then, so there's your 2 dollars. Now that’s all the money that all the people in the world have. Now 20 years pass and you have to pay back all your money. Can you please give me back 2 dollars and 10 cents? I don’t have 10 cents. You don’t have 10 cents? Well, how are you supposed to pay me back? Ok then, well I tell you what. I'm going to help you out since I'm such an awesome bank and I'm going to give you another 2 dollars; because the other 2 dollars will hopefully make it so you can pay back that other 10 cents that you owe me. Apart from now, you owe me 4 dollars and 20 cents because I've given you another 2 dollars. So another 20 years go on, and can you please give me 4 dollars and 20 cents back? I don’t have 20 cents. You don't? Oh, we will keep bolstering you up again. Here's 6 dollars, can you pay me 6 dollars and 30 cents? Umm... no. Ok, how about 8 dollars and 40 cents? Noooo... Ok then, we have a good understanding of how money works. But lets say you have a job. And because you have a job you make more money, so therefore you can pay back your debt, right? Yep. Ok then, cool. So we're gonna say you’re a business owner. What kind of business do you want to own? Umm... Entertainment centers. Entertainment centers; that sounds awesome. So I am going to give you 2 dollars to start your entertainment business, right? And we're going to have two other people who've bought houses and they are going to have 2 dollars each so they can build their house, right? Yeah. Ok then, cool. Now over time of course, because your business is doing so well because you're such a successful entertainment business person, that you end up earning half the money that those people have. So you end up with 4 dollars and they end up with a dollar each. So, can you now pay back the 2 dollars and 10 cents? Look at what you got now, can you pay back 2 dollars and 10 cents? That's your money there, can you pay it back? Yeah. Ok, cool. What about these guys here, can they pay it back? No. They can't. So, what happens to them? What do you think would happen to them... ...when the bank says, "Give me my money" and they say, "Well, I can't, I don't have it"? What happens to their house? They can't have it anymore. They take it back? Yeah, they take it back. And basically this is just with three people. And in this situation one person has won and made a lot of money and two people have basically lost and gone bankrupt, which is the technical word for losing your house. The important thing to remember is this is just three people, but in the world we have around 5 to 6 billion people. So even though this exact same thing happens, we're still going to have 2 billion people that make a lot of money and the other 4 billion who get into a lot of trouble. Thank you so much for this conversation. It was a pleasure. You will end up on YouTube. Cheers. Hello!

Video Details

Duration: 4 minutes and 1 second
Country: United States
Language: English
Producer: Sam McPherson
Director: Sam McPherson
Views: 141
Posted by: cdf83 on Aug 30, 2010

a Video of me teaching a 8 year old about the monetary system, its the first time i introduced her to the idea, id reccomend teaching every child(and ADULT for that matter) this system so they understand that money = debt

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