Corruption in Australia is nothing new, the only reason Australians don't seem depressed like the Brits even though they're in the same situation is because they have the sun.
The entire financial systems in the west all are. They print money from notning. Smaller banks loan more money than they have. Government owes more money that they can ever pay.
True but since banking is based on credit they don’t even need funds from customers (at the top anyway) to create loans. It seems they just invent it and use fractional reserve banking as well. In any other business this would likely be called an illegal racket.
technically the money they borrow isn't theirs, it's created first from thin air, then the borrower pays for stuff and that's how that money comes in savings accounts, and is then immediately used also as backing for more loans...
You should make a video where you explain how the bank doesn’t even need to have the money from the depositors. They create money when they issue loans. They only need to have enough liquid assets to cover the last 30 days of outflows. From APRA Mar 2024 they had a capital ratio of 20.5% meaning they had loaned $2,200B but only had $449B. Effectively 5X the money supply.
It also means that spread between what they pay depositors in interest on their savings and what they charge interest on loans, is X5. For every $1 they have deposited and need to pay interest to, they have loaned our $5 and charge interest on.
@@MS-sd1uzit's not a difficult concept to grasp. i'm pretty sure he does know, he just didn't bring it up cause it doesn't change anything about the video's message.
That is incorrect. They create credit, not money when they issue loans. After all, if you were to take out the money or transfer it away they have to pay that out. At the end of the day they need to settle any deficit at the central bank. That is the same as I writing a IOU on a paper saying I owe you $5.
@@alexpun7205 CBA loans Alice $1M to buy a house. Westpac loans Bob $1M to buy a house. Alice buys the house off someone who banks with Westpac, Bob buys the house off someone who banks with CBA. The two transfers, net to 0, so nothing moves at the RBA. There is now $2M more in the economy. Call it money call it credit, same end result. The two home sellers are cashed up and buying new utes, prada handbags, etc.
They only reason is works is because deposits are too sticky. If everyone stopped leaving money in their 0.1% transaction accounts maybe we see some deposit competition.
The only reason this works is because we, the people, are naive enough to trust the bank guy and give him our money. plus the fact that interests are crazy and should be criminal.
banks then proceed to borrow from each other money... if you have four major banks, and one needs more cash, they'll get it from one of the other four, also for a price, but unless everybody decides to take out cash the money is always somewhere in one of the banks...
you should change your bank every 6 to 12 months, except for long term investments like you should do with your ISP, energy, water, insurance... provider and getting the best new customer discounts.
Where I live there is only one provider I can get electricity from. Natural gas (for running our furnace and hot water): only one provider. Water and sewer utilities: only one provider. Internet and cell phone: there are multiple choices, but most of these companies are resellers from one of two national networks (pricing from all options is virtually identical). Rates are high and continue to go up without warning or alternatives.
Doing that might get you flagged as high-risk for nefarious activity like money laundering. Maybe spreading your money around in smaller accounts across various banks and credit unions could work.
In some countries they are phasing out interest on current and savings accounts and instead charging a fee to use their services. Which is quite fair in my opinion as there is still a bit of money floating around that isn't in banks pockets yet.
Can confirm. Banks want deposits now more than ever. This is the time to take it out of the Big4. Ofcourse, a lot of us have kept our money in offset accounts so that’s a dependency.
I moved to Up Bank for this reason. But now they reduced the savings rates. Wonder if they are still as good as they used to be. Might have to look around again.
Only issue with moving my money around is only two banks lend for a mortgage in the small town I live in (Westpac and ANZ) so I’m stuck with whatever they offer.
There are online banks like UBank and ING though. You can open a transaction account with Westpac or ANZ then transfer the money to UBank and ING and get a home loan with them instead.
I'm sure at higher up levels in banks they wonder why shurgard gets to charge people money for the service of storing their stuff and they as a bank can't charge you a fee for keeping your money safe... the injustice.
how does the Money Multiplier effect influence this profit model? under a 10% fractional reserve requirement system, when initial 100$ deposit can eventually create up to 1000$ of loans, is the interest margin also multiplied many times?
13b so 1/3rd of the cost of the NBN original plan just so they can sit on the money, they would've made more by increasing our internet for competitive business in Australia.
The thing is also that with fractional reserve banking the banks have a terrible leverage on that margin as well. For every dollar you save in the bank they can lend at least ten times as much to others.
You forgot about the deposits with the central bank being remunerated highly bcs of the liquidity surplus of the banking system after years of liquidity provision earning them riskless returns
Chris, I appeciate that kind of explanation. In the world where there have been so many cases of countries where there have been financial troubles i.e. Greece or the US in the GFC amongst others (most are obviously rocky semi democracies), do you think that most Aussies don't do this out of fear of that happening to us? or is it that we're all too lazy financially to risk moving our life savings into a bank that could potentially go bust? Lets face it, money is best spent making more money....if you're in a position to have enough to put it in something.
Game keeping savings in a bank these days, the only reason they can pay interest at all, the currencies are falling in value increasing the price of most assets.
Bank take money, bank make money more numbers, bank loan money to workers who slave away to pay bank more money, bank make interest higher, bank make more money, bank happy.
u are the smartest best looking and actually dry humor funny comedian of the planet... but please try to take on some lighte rissues :D (we are all depressed ALREADY)
also u forgot that banks basically print money out of thin air (central bank) then loan out that money like 1 mio to private banks (at currently 4,35%?) then the private bank will type in the computer loans worth 100 mio to slaves or to buy real things in the real world like houses to rent these out or resell at higher price... with digital money created from paper money created from nuthin (all that gives FIAT money it's value is that someone works for it)
so there are 98 banks in 'Straya? Are you sure? Seems kind of low to me. Anyhow, most people choosing among only four major banks is NUTS! Aside from looking at banks, people should really consider other financial institutions as well, like credit unions, if there is such a thing there. A brokerage account with bill pay feature is also a possibly better alternative.
I don’t know about Melbourne or community banks, but I’m pretty happy with ING. Have been with them a few years now and getting a decent 5.5% on my main savings account, paid monthly. You have to meet some conditions, but easily done.
This is all because there are no public banks. If the government ran banks they'd increase savings interest as a means of voter benefit but private ones don't care and profit.
I remember when I first started out moving my money around not understanding how many works! Put money in bank, bank moves money around in the form of fees. The government moved my money around in the form of taxes. All seriousness though, I really enjoy the way this channel goes about teaching people the gospel of how many works in a simplistic form! Never keep your money in one spot, especially with just one Bank! If you still peoples BAD, but when the bank loses your money because “reasons” oh well, save up more! But when you do, you should totally let us hold onto your money for you!
Should be noted that refinancing your 30year homeloan to save a few dollars on interest rates is one of the worst mortgage/financial decisions you can make for your family. Please 🙏 don’t do this. It will cost you hundreds of thousands over the lifetime of your loan.
Replace that pyramid with a printer. Banks create money out of tbin air. They dont hold anywhere near enough to service loans. They just print money to give to you and charge you interest on it. Wish i could just print money, lend it to people and they pay me. Money for nothing. I'd be super rich. Rich enough to start my own bank.
Banks don’t print money, at least not in the US, they get money from using money a rich bank owner already has or loaning it from another bank, or having money people store in the bank. they give that money to someone who needs money for a car, house, business etc. and they make money on the interest they get from the loan, they can’t just make money, only the government can do that, they just have a ton of it in the first place (from people keeping they’re money in it) and use that money to hand out loans, they use the money people store in it which is fine as long as people don’t take out all the money at once, sorry if this is confusing, but the bottom line is they don’t make money out of thin air they just have a ton of it in the first place
Yeee, but no savings account is ever going to beat a proper investment anyway, and my rainy day fund doesn't have to be so big that it actually matters if I get a 1 or 3% interest rate 😁
You forgot to add at the end, “I am not suicidal, I have no ideations of suicide, and I lead a very happy and fulfilling life.”
The ACCC is a great department, but unfortunately they have been completely (intentionally) neutered.
Corruption in Australia is nothing new, the only reason Australians don't seem depressed like the Brits even though they're in the same situation is because they have the sun.
accc are government parsites that doesnt help cost of living to be fixed
@@w花b Lmao
so a bank is a pyramid? INTERESTING!
Illuminati confirmed
@@accelerationgate5089think the joke is a pyramid scheme
The entire financial systems in the west all are. They print money from notning. Smaller banks loan more money than they have. Government owes more money that they can ever pay.
A pyramid is the most natural shape ask ancient fuks
Brother, that’s not a pyramid… that’s a tetrahedron!
// Not the Illuminati
Banks are like that stingy friend who rounds up when you've borrowed from them and rounds down when they've borrowed from you
So, essentially banks are like Scott. Screw you, Scott.
Hahah. Funny. I like that.
This channel is gold.
not sure if i'd be happy or sad if the accc found cartel behaviour between the big 4
do not rejoice when your enemies fall
The ACCC wouldn't be able to find their own arsehole they're that incompetent.
Never be happy, because the penalties will NEVER be higher than the gain
True but since banking is based on credit they don’t even need funds from customers (at the top anyway) to create loans. It seems they just invent it and use fractional reserve banking as well. In any other business this would likely be called an illegal racket.
Fighting with greed using education. You are the true hero.
In one sentence, they pay you peanuts to give them your money, and charge you handsomely when you borrow theirs.
technically the money they borrow isn't theirs, it's created first from thin air, then the borrower pays for stuff and that's how that money comes in savings accounts, and is then immediately used also as backing for more loans...
I am so glad I discovered your channel❤
i love your content. all your videos are informative and the skits are hilarious.
We need more of this conversation everywhere
Amazed how the story in AUS and CAD are similar. You have 4 big banks, we have 5. Customer inertia lets them get away with robbery.
I'm not Australian but love your channel. Yea Nah yea mate!
This is one of the best sites on TH-cam !
Move your money around, lol, that’s assuming we have money to move around after being screwed in every direction financially
Thanks! How does printing money come into this?
Thanks so much for your service!
Love this channel. Colorado USA
Love it mate , the way you put it out...❤
You should make a video where you explain how the bank doesn’t even need to have the money from the depositors. They create money when they issue loans. They only need to have enough liquid assets to cover the last 30 days of outflows. From APRA Mar 2024 they had a capital ratio of 20.5% meaning they had loaned $2,200B but only had $449B. Effectively 5X the money supply.
It also means that spread between what they pay depositors in interest on their savings and what they charge interest on loans, is X5. For every $1 they have deposited and need to pay interest to, they have loaned our $5 and charge interest on.
Yeah the video was absolutely wrong. How does this guy not know what fractional reserve banking is
@@MS-sd1uzit's not a difficult concept to grasp. i'm pretty sure he does know, he just didn't bring it up cause it doesn't change anything about the video's message.
That is incorrect. They create credit, not money when they issue loans. After all, if you were to take out the money or transfer it away they have to pay that out. At the end of the day they need to settle any deficit at the central bank.
That is the same as I writing a IOU on a paper saying I owe you $5.
@@alexpun7205 CBA loans Alice $1M to buy a house. Westpac loans Bob $1M to buy a house. Alice buys the house off someone who banks with Westpac, Bob buys the house off someone who banks with CBA. The two transfers, net to 0, so nothing moves at the RBA. There is now $2M more in the economy. Call it money call it credit, same end result. The two home sellers are cashed up and buying new utes, prada handbags, etc.
Love your work
And despite this Credit Suisse managed to go bust.
As Tyler pixel pointed out. A bank is a pyramid. Now that is clever content. Well done 👍🤣
Remember, Chris is NOT suicidal.
They only reason is works is because deposits are too sticky. If everyone stopped leaving money in their 0.1% transaction accounts maybe we see some deposit competition.
The only reason this works is because we, the people, are naive enough to trust the bank guy and give him our money. plus the fact that interests are crazy and should be criminal.
inertia - it's a powerful force.
@WruGapps yeah, bank NIM is around 2% globally. if everyone did that banks would literally be loosing money every second.
banks then proceed to borrow from each other money... if you have four major banks, and one needs more cash, they'll get it from one of the other four, also for a price, but unless everybody decides to take out cash the money is always somewhere in one of the banks...
you should change your bank every 6 to 12 months, except for long term investments like you should do with your ISP, energy, water, insurance... provider and getting the best new customer discounts.
Where I live there is only one provider I can get electricity from. Natural gas (for running our furnace and hot water): only one provider. Water and sewer utilities: only one provider. Internet and cell phone: there are multiple choices, but most of these companies are resellers from one of two national networks (pricing from all options is virtually identical). Rates are high and continue to go up without warning or alternatives.
Doing that might get you flagged as high-risk for nefarious activity like money laundering. Maybe spreading your money around in smaller accounts across various banks and credit unions could work.
BANK RUN LET'S GOOOOOOOO
also, banks will increase the int rate they charge regardless if the fed rate goes up or DOWN.
In some countries they are phasing out interest on current and savings accounts and instead charging a fee to use their services. Which is quite fair in my opinion as there is still a bit of money floating around that isn't in banks pockets yet.
Can confirm. Banks want deposits now more than ever. This is the time to take it out of the Big4. Ofcourse, a lot of us have kept our money in offset accounts so that’s a dependency.
This guy is really good!
Fairly good.. at best
Exact same problem in Canada.
Increase in NIMs are driven by higher borrowing demand and higher borrowing demand is caused by governments running larger fiscal deficits.
I moved to Up Bank for this reason. But now they reduced the savings rates. Wonder if they are still as good as they used to be. Might have to look around again.
Up is Bendigo's Neo bank
Up Bank interest rates are shite - only 4.5% , uBank rate is 5.5% (w/ 500 deposited p/m, no need to grow balance)
@@Inflammasomesit was just $200 but they upped it to $500 on 1 July which is a challenge for me at the moment 😞
@@mpras684 you can cycle money from one account to another if you really need to. I used to do it when I was younger.
0:55 Taken, not earned.
Only issue with moving my money around is only two banks lend for a mortgage in the small town I live in (Westpac and ANZ) so I’m stuck with whatever they offer.
There are online banks like UBank and ING though. You can open a transaction account with Westpac or ANZ then transfer the money to UBank and ING and get a home loan with them instead.
I'm sure at higher up levels in banks they wonder why shurgard gets to charge people money for the service of storing their stuff and they as a bank can't charge you a fee for keeping your money safe... the injustice.
how does the Money Multiplier effect influence this profit model? under a 10% fractional reserve requirement system, when initial 100$ deposit can eventually create up to 1000$ of loans, is the interest margin also multiplied many times?
13b so 1/3rd of the cost of the NBN original plan just so they can sit on the money, they would've made more by increasing our internet for competitive business in Australia.
The only thing a person can do is educate themselves and then invest that money to get real returns
Bank sounds like it is potentially able to roll the economy to any booming industry
The thing is also that with fractional reserve banking the banks have a terrible leverage on that margin as well. For every dollar you save in the bank they can lend at least ten times as much to others.
Also why I have ING as a second account, much better interest rates, and better for travel too
Thank you for the information
Chris Kohler, doing Alan Kohler's good work
Money is debt. Banks create new money when they give loans.
You forgot about the deposits with the central bank being remunerated highly bcs of the liquidity surplus of the banking system after years of liquidity provision earning them riskless returns
Wait, why isn’t he talking to himself…?
Chris, I appeciate that kind of explanation. In the world where there have been so many cases of countries where there have been financial troubles i.e. Greece or the US in the GFC amongst others (most are obviously rocky semi democracies), do you think that most Aussies don't do this out of fear of that happening to us? or is it that we're all too lazy financially to risk moving our life savings into a bank that could potentially go bust?
Lets face it, money is best spent making more money....if you're in a position to have enough to put it in something.
Or just invest your savings into commbank to hedge against rising NIM
Brilliant. Subscribed. Why did you stop?
Threatened? Paid off?
Power to the people!
But honestly, who can be bothered?
Another good example of voting with you wallet.
Game keeping savings in a bank these days, the only reason they can pay interest at all, the currencies are falling in value increasing the price of most assets.
good point, but money is so no-one can be bothered. seems that's the key to exploiting people - make it boring
Well good stuff
Intresting shape, like a pyramid almost
Well thats how they make their money. Its a pity its up to the ACCC to make sure its fair. So this was posted a year ago now. Any updates on that?
Cool ! thanks for video buddy ! :D
Bank take money, bank make money more numbers, bank loan money to workers who slave away to pay bank more money, bank make interest higher, bank make more money, bank happy.
So buy bank shares and join the robbers.
u are the smartest best looking and actually dry humor funny comedian of the planet... but please try to take on some lighte rissues :D (we are all depressed ALREADY)
Its okay, i dont have any money so that solves thay problem.
also u forgot that banks basically print money out of thin air (central bank) then loan out that money like 1 mio to private banks (at currently 4,35%?) then the private bank will type in the computer loans worth 100 mio to slaves or to buy real things in the real world like houses to rent these out or resell at higher price... with digital money created from paper money created from nuthin
(all that gives FIAT money it's value is that someone works for it)
Banks take your money, then gamble with it. How do we put the crooked bankers out of business? Put your money in Bitcoin
so there are 98 banks in 'Straya? Are you sure? Seems kind of low to me. Anyhow, most people choosing among only four major banks is NUTS!
Aside from looking at banks, people should really consider other financial institutions as well, like credit unions, if there is such a thing there.
A brokerage account with bill pay feature is also a possibly better alternative.
Can you recommend a community bank in Melbourne?
I don’t know about Melbourne or community banks, but I’m pretty happy with ING. Have been with them a few years now and getting a decent 5.5% on my main savings account, paid monthly. You have to meet some conditions, but easily done.
@@ReggieLouise Thanks.
This is all because there are no public banks. If the government ran banks they'd increase savings interest as a means of voter benefit but private ones don't care and profit.
Is it just me or are banks just... evil?
is this the legend Alan Kohler's son?
Yes
Is Alan Kohler this legend's father?
lol funny bank
Gotta love capitalism. Best system ever (for the top1%)
I remember when I first started out moving my money around not understanding how many works! Put money in bank, bank moves money around in the form of fees. The government moved my money around in the form of taxes. All seriousness though, I really enjoy the way this channel goes about teaching people the gospel of how many works in a simplistic form!
Never keep your money in one spot, especially with just one Bank! If you still peoples BAD, but when the bank loses your money because “reasons” oh well, save up more! But when you do, you should totally let us hold onto your money for you!
Yeah fuck the big 4 man. I moved to a small Credit Union and I'm on a much better rate.
Should be noted that refinancing your 30year homeloan to save a few dollars on interest rates is one of the worst mortgage/financial decisions you can make for your family. Please 🙏 don’t do this. It will cost you hundreds of thousands over the lifetime of your loan.
Please explain
Are you going to talk about the reserve ratio on those deposits?
Bitcoin
Replace that pyramid with a printer. Banks create money out of tbin air. They dont hold anywhere near enough to service loans. They just print money to give to you and charge you interest on it. Wish i could just print money, lend it to people and they pay me. Money for nothing. I'd be super rich. Rich enough to start my own bank.
Banks don’t print money, at least not in the US, they get money from using money a rich bank owner already has or loaning it from another bank, or having money people store in the bank. they give that money to someone who needs money for a car, house, business etc. and they make money on the interest they get from the loan, they can’t just make money, only the government can do that, they just have a ton of it in the first place (from people keeping they’re money in it) and use that money to hand out loans, they use the money people store in it which is fine as long as people don’t take out all the money at once, sorry if this is confusing, but the bottom line is they don’t make money out of thin air they just have a ton of it in the first place
Where’s the funny part :(
Yeee, but no savings account is ever going to beat a proper investment anyway, and my rainy day fund doesn't have to be so big that it actually matters if I get a 1 or 3% interest rate 😁
Bitcoin fixes this.
Banks raising interest rates to combat the inflation created by banks is peak modernity. 🤣
I never knew you were Australian until now. Your accent is definitely not Australian.
Tis' a joke of course.
As long as they use the right pronouns no one cares.
I bet the same people who vote for lib and lab are the ones crying about this