The Money View: The Inherent Instability of Credit

The video tutorial explains the mechanisms behind a housing bubble, focusing on the roles of credit and money expansion. It uses a house buying and selling example to illustrate how mortgages and deposits function as assets and liabilities for banks. The tutorial highlights the importance of the interbank funding market and the wholesale money market in these transactions, especially during financial crises.

What is the relationship between the mortgage loan and the deposit account in the context of banks?

Explain the mechanism of how a mortgage is funded and how a deposit is invested.

How does the expansion of credit facilitate the purchase of a house?

What role does the interbank funding market play in the expansion of money and credit?

In what way did the recent crisis highlight the differences between traditional banks and non-bank entities?