The value of money is determined by how much (or how little) of it is in circulation. But who makes that decision, and how does their choice affect the economy at large? Doug Levinson takes a trip into the United States Federal Reserve, examining how the people who work there aim to balance the value of the dollar to prevent inflation or deflation.
Lesson by Doug Levinson, animation by Qa’ed Mai….(read more)
LEARN ABOUT: Investing During Inflation
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
HOW TO INVEST IN SILVER: Silver IRA Investing
As we go about our daily lives, buying and selling goods and services, we rarely stop to think about the value of the dollar bill in our wallets. What makes a piece of paper with some ink on it worth anything at all? The answer lies in a combination of factors that have come together to establish the trust and confidence that people have in the currency of the United States.
First and foremost, the U.S. government stands behind the dollar as a medium of exchange and a store of value. When the government issues currency, it is essentially creating a promise to pay that dollar amount to the bearer upon demand. This promise is backed up by the full faith and credit of the U.S. government, which has a long history of fiscal stability and responsibility. As long as people believe that the government will honor this promise, they will continue to accept and use dollars in transactions.
Another key factor in the value of the dollar is its widespread use and acceptance. The U.S. dollar is the most widely traded currency in the world, accounting for about 88% of all foreign exchange transactions. This means that people around the globe have a vested interest in the value and stability of the dollar, which reinforces its status as a trusted and reliable currency.
The value of the dollar is also affected by economic factors such as inflation and interest rates. Inflation refers to the general increase in prices over time, which reduces the purchasing power of a dollar. When inflation is low and stable, the value of the dollar is more predictable and secure. Similarly, when interest rates are higher, investors are more likely to hold dollars, which increases demand and strengthens the currency.
Finally, the perception of the dollar as a safe haven in times of uncertainty or crisis can also contribute to its value. Because the U.S. economy is the largest and most diversified in the world, and because the U.S. government has a track record of stability and reliability, the dollar is often seen as a safe asset during times of global turbulence.
In summary, the value of a dollar bill is not based on any intrinsic worth of the paper or ink itself, but rather on a complex web of factors that have established the dollar as a trusted and reliable medium of exchange. By standing behind the promise to pay, maintaining stable economic conditions, and building international confidence in the currency, the U.S. government has created and sustained a valuable and ubiquitous unit of currency.
Even if bond yields are increasing and stock prices are falling, the markets continue to have doubts about the Federal Reserve's commitment to sticking to its strategy to raise interest rates until inflation is under control. What is the best way to profit from the present bear market while I'm still weighing my options on the sale of my $401,000 worth of stocks?
Hello, could anyone please help me answer some reflective question,according to the video?
Zimbabwe is a great example of what happens when you think printing more money fixes your economy
amazing video We all want to live better lives and be financially independent. The appropriate investments, frugal lifestyle, and budgeting can easily help you achieve this. I'm pleased I was taught early on to work hard for financial independence.
Heard someone say the best season for a financial breakthrough is now, especially with inflation running at a four-decade high. I have approximately $750k stagnant in my portfolio that needs growth. What is the best way to take advantage of this downturn?
I find fiat coins and paper money pretty boring, I miss the days when coins were silver
Investing early can greatly increase the potential for long-term growth. According to a recent study by Vanguard, if an individual invests just $3,000 at age 25, they could have over $500,000 by age 65.
This video should he called "An introduction to Keynesian Economics" aka centrally planned economics. They described how the American dollar works and it is a corrupt and broken system.
the inflation keep going and the bussiness owner pay sallary to their worker same year on year 🙂
Regime change wars
Blind trust.
If this doesn’t enrage you somethings wrong with you
your mama
Did anyone forget this video was made by ted ed for a moment?
Successful people don't become that way overnight. what most people see at a glance-wealth, a great career, purpose-is the result of hard work and hustle over time. I pray that anyone who reads this will be successful in life..
The most valuable resource is human resource. We can have money, but if there’s nobody to render the good or service we want to pay for, then what good is the money? Even the human resource of self sufficiency is limited if you have no natural resources to work with. That’s why land ownership is so useful. I wonder if that’s why it’s called REAL estate.
Invest in stocks is a great way to invest your money. The team is constantly checking the market for changes and make sure that you are always informed about the best time to invest. As a result, I have made more money than ever before, and I don't have to manage my portfolio on my own! Invest in stocks, it's worth it!
유통량에 의해 지폐의 가치가 결정된다는 말 감동이네요. 전혀 생각못하고 있었어요.
hi
it's good
Jewish propaganda
⥊ 9
For a few months now I have been searching tirelessly for information on how to start investing. I even payed $1000 for a course that I now regret. It appears that there is no structured guidiance for beginners on how to get started in this realm. I've come across several investors making well over $250k/annum and would be grateful if anyone on here could provide insights on how to get started, identify potential stocks, when to make an entry, exit etc.
BS. It's the tax liability that creates the need for, and thus gives value to, any fiat currency.
You have to pay taxes and you have to pay them in dollars.
No "faith in the dollar ' is required.
Money creation is not inflationary as long as there is spare capacity in the economy.
This nonsense is treating fiat currency as if it were a commodity in itself. If there's full employment and all resources in use, then money creation will be inflationary.
#learnMMT
Invest in metals like gold and silver, they are the only ones that keep their value!
According to the University of Chicago Economics Milton Friedman the Fed or Federal Reserve Bank is thought to have been the cause of what Americans know as The Great Depression. But it is a very interesting point that the American Dollar is said to be backed by the production of goods and services by the American Economy and thank you for this informative video.
This video is so wrong it's a good laugh. The Fed has no theory of how much money should be in circulation, nor any ability to control it. They are responsible for creating only a small proportion of the money supply. Most money is created and destroyed by private banks as they lend it out, with their own sense of risk aversion or acceptance. Why was QE ineffective? Because while the Fed was trying to add to the money supply (printing money as many argued), all the private banks were becoming ever more risk adverse and unwilling to lend, thus providing the contraction of money supply that was driving the economy.
This is the perfect time to invest in Bitcoin because of the rise in Bitcoin…. I highly recommend Mrs Satina Bation she is my current trader and her strategies are working.