And I want to start with the very simple case, of, of buying and selling goods. So let's suppose, that you and I are the only people in the world. Okay? And that you are making something I want, and I'm making something you want, but these wants and productions aren't lined up in time. So we have a problem. I need to get your stuff, without having anything to give you. You need to get my stuff without me having anything to give you. So, so barter's not going to work here. Okay. So one way we could arrange our, our lives, okay, is to have money. [SOUND]. You can sell me some goods. So I'm writing minus goods. So you, you had goods on your balance sheet. And now we're subtracting them from your balance sheet. And sell them to me, plus goods. [SOUND]. Okay? And I send you some token. Okay? In the other direction. Okay? So, minus a cha, there's a change in my holding of money, delta m. Okay? And here, plus delta m. [SOUND]. Not so complicated. We're going to start simple. Okay? That is, money, that's money. But suppose there is no money, in this economy yet. Or we haven't agreed on it or something. let's now think of another, another mechanism. We could do this entire thing not with money, but with credit, with pure credit, just by keeping track of, of accounts. So I get the goods from you and I say, thanks for those goods, and let me just write a little note to you indicating that I owe you. I owe you. [NOISE] And that's a liability. It's a debt. I owe you. And that is a. I'm going to put delta as the changes in IOU's, because we may have already have IOU's out there as well, and there's just more IOU's now. Okay? I owe you more, because I have these goods, here. So this is, this course requires us to trust each other, and things like that. That these are, these are IOU's, and this might be the sort of thing that you use with friends. Right? Like I'll pay for lunch today, you pay for lunch tomorrow. That sort of, that sort of thing. Familiar with that. But if we don't trust each other. So that, that's the pure credit kind of system. One thing I want to note about this pure credit kind of system. Which we'll come back to, it's kind of important, later on. notice that the quantity of outstanding IOU's increases when we write a transaction. you know, we're writing a new piece of paper that says IOU. Whereas, when we did it with money, we're just exchanging existing pieces of paper back and forth. The money supply isn't changing when we, when we move a piece of paper from my pocket to your pocket. Okay? But the credit supply is changing. The outstanding quantity of credit is changing, when I write an IOU. So there's an expansion of credit in this, this mechanism. So it's a little different. 'Kay? But now suppose that you know, we don't trust each other. we don't know each other, well enough. We're not sure we're going to see each other again or something like that. so now, but we trust some third party. [SOUND]. That's why I left that room in between these two. Okay? And that third party, is willing to step in between the two of us. Okay? Accepting my IOU, and issuing its own IOU, which you accept. I'm going to call this third party a bank. Okay? Now I've used M, even though this is a liability of the bank. And it comes from no where, it's, it's an expansion of the balance sheet. So, just like in the pure credit economy, there's an expansion of the money supply, there's an expansion of credit, in order to facilitate this transaction. 'Kay? There's more money, because money is a form of credit, actually in this world. It's a liability of the bank. So that's why it expands and, and contracts as bound as, as the, the patterns of trade move. Alright, all baby stuff. Okay. But some deep and puzzling economics, under, underneath that. This, of course, is, is much more like the modern economy. Okay. The modern, the modern, this is how modern economy, works. OKay, in, in a very stripped down simplified way.