“OK! Settle down you lot! Economics. Today we’ll be covering ‘Credit Creation’, right?
Example: Your nan slips off the dish and leaves you fifty grand. You bank the cash and it’s the Bank’s liability; they can lend you 90% of ten times their liabilities. So they can lend you £450,000. Your loan then becomes the Bank’s asset. That’s Credit Creation.

But it’s much better than that! So you buy a gaff with the cash and the £450,000 is your liability, secured against the place. The person who sold you the gaff banks the money. Their Bank can then lend 90% of ten times their liabilities, that’s err… (scribbles on board) £4.05m as new assets becoming the liabilities of new punters. Any questions?

Yes, Jade. Security? Yeah, I know it looks like the only real money is your Nan’s £50k but the properties are worth more.
What if they’re not? Ha, ha, good one.
What if there is massive reduction in demand due to negative net migration and unheard of recession due to a 1:2000 stress? Well Jade, you’ve obviously done your homework but that’s all we have time for today.

Next week we’re going to cover Pensions. Go get cracking with your research. As you know a Pension isn’t just an anagram of ‘No Penis’ – its actually a French word for a large B&B complex in the Vaucluse converted from a Mansion with reinvested bonus payments relieved at 40%.
See you next time!”