If asset prices reflect expectations about the future, the market rising should be viewed with optimism, but there might be less optimism, and there may even be pessimism, about a market that is being artificially propped up by a central bank. What if the central bank can’t print any more money and stock prices drop? And how can all of this money printing be good for the country’s currency?
Referenced in this video:
– Money creation in the modern economy
– Money, Reserves, and the Transmission of Monetary Policy: Does the Money Multiplier Exist?
– Open Letter to Ben Bernanke
– Evaluating Asset-Market Effects of Unconventional Monetary Policy: A Cross-Country Comparison
– A General Equilibrium Approach To Monetary Theory
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Ben, what a great video. I commented about three weeks ago that I didn’t think your description was 100% accurate. I stand corrected. This video is worth more that a semester at Harvard Business school on macroeconomics. I’ve always been fascinated by the global financial system, but honestly couldn’t get my head around what QE does. After reading one of the books you recommended and other readings I feel like my eyes have been opened. I know you’re 100% against trying to time the market, however after being enlightened by your description I’m convince more than ever that we are in a massive asset bubble driven by false fears that cash is worthless and the false belief the Fed can fix an economy with this much unemployment. Thank you for the great videos and information. You have a gift!
USA print all the money and the inflation is shared worldwide. USA is the major source of trouble in this globe.
wtf never felt so dumb. I'm not following…. like any of it. bless u all smart ppl ….. tf
Just when did the American people vote to do away with actual value as the basis of its currency and replace it with imaginary "faith" in the honesty and integrity of the bankers.
Sounds like something the Rothschilds, or Rockefellers, (etc) came up with to enable them to periodically rob wealth from the entire population and blame it on bad luck.
Cool story. And the money use by the fed to buy corporate bond in 2020. Where it comes from ? Is it also banks reserve only ?
Really informative video! I never realized how in-depth the financial system is until I watched this video! Keep up the great work!
It seems that in the end, Q&E does create inflation.
Can please sombody tell me how bank reserves are "special kind of money"? Let's assume my bank, say bank A, receives money because – for exmpale – I got paid by my employer, who is in bank B. Consequently, bank's A deposits go up and bank's A bank reserves go up at the same time. Isn't it how it is recorded in the accounts? In 5:15 Ben Felix says "A bank with a net positive flow for that day might lend their excess money to a bank with a net negative flow." So that could be the same money I got paid with, if my bank at the end of the day has positive net flow. So how is bank reserves money different from money used outside of the central clearing house?
Great video Ben, do you still think QE doesn’t lead to inflation? If you still think this, could you do a video explaining how inflation occurred. Thank you.
trying to wrap my head around this.i get its not money printing, but i think there is a relationship between "reserves" getting old debt off books, lower interest rates, and inflation. reserves are not money but lowering the interest rate till all the big corps take out billions of dollars is inflationary. its a loan they took. and its open market money without the goods to back it. I keep hearing how it's not inflationary, but if it wasn't than the fed wouldn't have a reason to do it.
If money printing is not causing inflation I don't know what it is then ?
P.S. Psychopaths are in charge
So what happened? Suddenly we have an inflationary crysis
narrator: could the recovery all be a mirage?
yes
Does this guy blink?
This video proves that even smart people can be ignorant of truth right in front of their face.
The fed can not effect inflation, eh? We shouldn't look to fed as a signal for investing, eh?
I can't think of two ideas that have been more soundly invalidated by historical record.
If taking money out of circulation doesn't reduce inflation, you need to increase supply.
I came from future.
Inflation goes brrr here.
What is your opinion about this now? Two years later?
thank you, very insightful
money is not currency
Talking nonsense
Hi Ben, great video. In relation to QE: I would like to hear your opinion about de parallels between de Japenese stock market (which hardly grew after huge money printing) and the current situation in other developed countries, like de US and Europe. Are they risking the same situation as in Japan or are there differences? Thanks in advance!
Ben you have taught me more about finance than any other source, and honestly changed the way I think about investing. I’m not sure you’re aware of just how big an impact you’re having. Thank you so much.
This video didn't age well
Never before have i learned so much yet disagreed so much at the same time. For instance this all creates a culture of debt and servitude. Also deflation is a good thing.
Bollshit! Paid troll to make it look very complex sistem for ppl to understand…. its all a fraud and a scam!
Lol deflation… so we.get taxed and that goes to the fed.. our money is charged interest and that goes to the fed.. our future is mortgage and that goes to the fed and the smaller banks have been consumed leaving a big mafia cartel running things.. all at the feds profit of over 90 billion a year .. and at a startup cost of almost nothing.. and nobody questions this cartel.. ok fine maybe everyone is scared of the government being too powerful self running but that is no excuse to have a dictatorship of rothchild and their bloodlines controlling politics and silencing anyone who speaks out whilehoarding more power to a few… holding all their secrets to destroy them if they dont fall in line.. the most profitable organization and they do what with their money? Hoard more power.. atleast if we were using this to re invest into technology advancing society more democratically through elected government but noooo they all want more.. corruption run through humanity like a plague… and now we are left in the dust the normals cant fight back hold office not be controlled every way imaginable and the specials are now not even going to have a voice.. dark future is amongst us all