Concise explanation from a straight talking no BS northern. Presumably before QE the only way that money would go back to commercial banks is when the government paid out on redemption of the bond. This raises the question- will the government pay the central bank when the bond matures and will it increase government debt?
Not mentioned in your very erudite explanation is that the banks are selling their debt instruments to the Central Bank at a big profit, and pocketing a nice profit (as rates go down to zero, the market value of the debt increases). Later, when the central bank is doing the opposite of QE, as they are right now, Quantitative Tightening, they sell that debt back to the banks at a discount (as rates have now gone up, the market vale of the debt previously sold to the Central bank goes down). So effectively the only people making money off of QE and QT are the banks. They get to sell high and buy low. The Central Bank eats the spread.
Market activity sets interest rates; central banks or banks do not and cannot. The Fed (most central banks) do not create money; they create reserves; banks create money. Quantitative Easing may facilitate monetary expansion only with the actions of banks and borrowers.
I might try this with my bank ''hi, can l borrow £1000?'' - ''what is it for'' - ''oh well, Im in massive amounts of debt and l can't buy any of that crack iv become addicted to'' -'cool, yeh, thats fine'' - ''thanks dudes''
Mates what does it mean at 0:38 "they make the money digitally"? What do they actually do? Do they just increase the credit line of a corporate bank from which they buy treasury bonds?
..... This is delaying inflation by buying toxic bonds by creating into existence numbers on a computer and selling it to the rest of the world. Eventually all the digital money will devalue the currency of the whole world. So in a sense its another creative way to cause more debt.
This is good as far as it goes, but there is more. The bloke who devised QE, Professor Richard Werner, offers very clear explanations of how it works, right here on UA-cam.
Awesome video.... but, seems crazy they do this. I mean, wasn't it bad mortgage backed securities in the US that lead to the housing bubble?? Private investors were buying them and not getting returns. So now the US Govt is the one buying these bad mortgage backed securities? Weird
What you do is not QE! but force the banks to lend out the money. Banks hording all the cash and parking at the central bank because they are getting more interest is the cause of why currency is not going to the public. :D
You forgot the most important part: once the economy recovers, the central bank will sel all it's QE-adquired assets and destroy the money received to negate the increase in money supply from QE.
What debt? The banks were bailed out, not given a loan. The Federal reserve bought their toxic assets a few years ago. Now the federal reserve has found out these toxic assets aren't as toxic as people thought and are making most of their money back. If they make their money back then they are extracting the money they put into the system when they bailed out the banks, thus keeping inflation in check. Had they simply printed money and given it to the banks they would've had no control over the rate of inflation.
nor are they prepared to pay the servants! and that cannot go on for long and nation states assisting each other ended when Russia (or was it?) defaulted.on its payment in
Just so people below me know, the top 1% of the world accounts for anyone with $800,000 or more worth of property or cash - which really isn't that much - only about £530,000.
credit is debt loans are debt inflation is an increase in money supply. loaning monopoly notes to you and you have to pay it back with interest. IOU notes a promissory note. ( I promise to pay the bearer of this note the equivalent amount in Stirling silver) by law!
It's robbing Peter to pay Paul. Quantative easing today means climbing interest rates tomorrow. It's like giving your credit card to your crazy ex girlfriend. The Billionaires and millionaires have bled too much money out of the system. You need to find ways to get it back to the people who need it. Banks can't save an ecconomy. Only workers can do that.
They give rich banks money to make them richer. They could reduce tax so everyone has more disposable money to spend and stimulate the economy, but they prefer to give their rich mates in banking, who will give them million £ board seats in return, it…. Surprising that.
Why did people who got into mortgage difficulties not get any help? Houses where reposed and people ended up on the streets.What good does that do when you have people living on the streets because they can't pay.All this sounds like one big con very diificult to understand except for the ones doing their devilish deeds.And of course your buying power is down due to the value of your money.Makes you wonder if Karl Marx was right this system shouldn't exist.Boom recession depression and wars.What a lousy way to run a society..
Terrible explanation because it omits THE VERY IMPORTANT PART WHERE THE MONEY IN YOUR POCKET BECOMES WORTH LESS. Quantative easing or "Money Printing" as it should be known, increase the money supply making the cash in your wallet less valuable. It is just a TAX on everyone.
Not exactly, but getting there. The money wouldn't become less valuable if we actually spent the money and contributed to the economy, it's like recycling, you give money back into the masses and the money should pay for itself, if not more as people start businesses, have money to invent things/ideas, and spend their money consuming products. The real problem here is that the most of the money is going to majority stock holders who prop up the stock market by trading. So the rich are trading stocks back and forth using free money making it look like the actual economy is thriving, when really it's just a few hundred rich guys making some deals, while everyone else has to work tooth and nail to make a living, meanwhile the money they earn is worth less because the banks just gave the rich free money to spend, but they don't really spend it, they hoard the money and keep it liquid instead of actually spending it on groceries or whatever. The money they get is more likely to be spent on things like investments, which eventually they say, "Trickles down." We all know that is bullshit now. The reason why the money ALWAYS benefits the rich is to maintain their power, if the central banks didn't use QE, then many of the current biggest corporations would have gone out of business causing massive fluctuations and possibly economic collapse. That is exactly the problem though, the rich have basically trapped us into, "Obey us, or the economy will fail." The huge problem with this that we are essentially creating a bubble where most of the wealth is disproportionately falling into the hands of rich people who can't spend it fast enough in the right areas, governments and citizens alike become cash strapped and those cuts mainly only affect the poor and working class through cuts on social services, education, and healthcare, all things that regular people depend on. Basically, unless the rich somehow stop loving money we are all screwed, and we will have to assassinate all of the rich cocksuckers who caused this situation, sucks, but it is the only way now, voting can only get you so far, sometimes violence is necessary, like the French Revolution.
+Led Zed No voting can get you very far....the problem is, working class voters read Murdoch-newspapera and watch Murdoch-owned Fox and Sky news, and as a result, they blame immigration and foreigners for their wages remaining stagnant for 35 years. For example, in the Brexit referendum, Voter turnout of those aged 18-25 was 34%....the problem is apathy and disengagement.
+Led Zed And QE isn't exactly free money that can be traded....it's an asset swap mostly involving government bonds, although there have also been some Mortgage-backed securities swapped aswell. Fundamentally, it's an injection of liquidity into banks, not an injection of capital. I agree with your overall point though.
NeptuneNexus Huh? I said it was "liquid", maybe you missed the edit I made, also, don't government bonds/debt still mean they hold overall power? To me power and money are synonymous.
Can’t they print the money so we can add extra zeros to our notes and carry it in wheelbarrow like they did in Zimbabwe 😂 QE biggest pyramid scheme in history
...leaving aside all the mumbo jumbo explanations, isn't this QE the main cause of the high inflation we are in now? to me, explanations to the effect of "if this and that had happened after QE, we would not have inflation" sound like "communism has not been properly applied"
The rich get richer when QE electronic funds hit the markets, and then the poor get poorer as inflation begins. Two things are critical to the working poor and that is food and gasoline. They are our back breakers. They get hit hardest by inflation! In America they aren't factored into the inflation rate! Angry!
Fair play, that was a really good explanation. Have seen a few videos and this is the clearest one!
Concise explanation from a straight talking no BS northern. Presumably before QE the only way that money would go back to commercial banks is when the government paid out on redemption of the bond. This raises the question- will the government pay the central bank when the bond matures and will it increase government debt?
Not mentioned in your very erudite explanation is that the banks are selling their debt instruments to the Central Bank at a big profit, and pocketing a nice profit (as rates go down to zero, the market value of the debt increases). Later, when the central bank is doing the opposite of QE, as they are right now, Quantitative Tightening, they sell that debt back to the banks at a discount (as rates have now gone up, the market vale of the debt previously sold to the Central bank goes down).
So effectively the only people making money off of QE and QT are the banks. They get to sell high and buy low. The Central Bank eats the spread.
You sir, are a bloody genius! Thank you for your explanation...
Love it, brother!! Great (judgment free) explanation.
1) when internet rates are zero, you can borrow an infinite amount of money at zero cost. 2) local banks create money when they make loanes
reminds me of Alan Partridge explaining the World Cup 2004 group system fixtures compass
Market activity sets interest rates; central banks or banks do not and cannot. The Fed (most central banks) do not create money; they create reserves; banks create money. Quantitative Easing may facilitate monetary expansion only with the actions of banks and borrowers.
I might try this with my bank ''hi, can l borrow £1000?'' - ''what is it for'' - ''oh well, Im in massive amounts of debt and l can't buy any of that crack iv become addicted to'' -'cool, yeh, thats fine'' - ''thanks dudes''
Mates what does it mean at 0:38 "they make the money digitally"? What do they actually do? Do they just increase the credit line of a corporate bank from which they buy treasury bonds?
..... This is delaying inflation by buying toxic bonds by creating into existence numbers on a computer and selling it to the rest of the world. Eventually all the digital money will devalue the currency of the whole world. So in a sense its another creative way to cause more debt.
A debt that the consumers will exclusively pay
this sounded way better coming from the back of a cab
This is good as far as it goes, but there is more. The bloke who devised QE, Professor Richard Werner, offers very clear explanations of how it works, right here on UA-cam.
MI6 is very good at explaining quantitative easing
He gets so close to the correct answer, and yet so far off. 5/10
Awesome video.... but, seems crazy they do this. I mean, wasn't it bad mortgage backed securities in the US that lead to the housing bubble?? Private investors were buying them and not getting returns. So now the US Govt is the one buying these bad mortgage backed securities? Weird
Quality is rough bro
yeh good presentation
Wrong, wrong, wrong. Reserves are not lent outside the payments system. No reserves are required (or used) in the act of a bank making a loan.
What you do is not QE! but force the banks to lend out the money. Banks hording all the cash and parking at the central bank because they are getting more interest is the cause of why currency is not going to the public. :D
You forgot the most important part: once the economy recovers, the central bank will sel all it's QE-adquired assets and destroy the money received to negate the increase in money supply from QE.
I dun think it's actually possible to pay back the debt.. U should take a look at the balance sheet..:/
What debt? The banks were bailed out, not given a loan. The Federal reserve bought their toxic assets a few years ago. Now the federal reserve has found out these toxic assets aren't as toxic as people thought and are making most of their money back. If they make their money back then they are extracting the money they put into the system when they bailed out the banks, thus keeping inflation in check. Had they simply printed money and given it to the banks they would've had no control over the rate of inflation.
+agun17 Well in all its history it has NEVER done that
It's no surprise that Paul Mason is part of the "tribe".
nor are they prepared to pay the servants! and that cannot go on for long
and nation states assisting each other ended when Russia (or was it?) defaulted.on its payment in
Wolverhampton 5 00 6-2-7-5 Void it was fixed. Many cospirators in the race.
Just so people below me know, the top 1% of the world accounts for anyone with $800,000 or more worth of property or cash - which really isn't that much - only about £530,000.
Yep, that's an important point. The wealth is hoarded not among the richest 1% of the world, it's hoarded among the richest 0.00000001%.
User 0.2%
credit is debt loans are debt inflation is an increase in money supply. loaning monopoly notes to you and you have to pay it back with interest. IOU notes a promissory note. ( I promise to pay the bearer of this note the equivalent amount in Stirling silver) by law!
Still don't get it Paul
The only way to stimulate growth is to make sure people who need money have it.
Low wages. Low growth.
It's just a fact.
It's robbing Peter to pay Paul.
Quantative easing today means climbing interest rates tomorrow. It's like giving your credit card to your crazy ex girlfriend.
The Billionaires and millionaires have bled too much money out of the system.
You need to find ways to get it back to the people who need it.
Banks can't save an ecconomy. Only workers can do that.
They give rich banks money to make them richer. They could reduce tax so everyone has more disposable money to spend and stimulate the economy, but they prefer to give their rich mates in banking, who will give them million £ board seats in return, it…. Surprising that.
Giving the banks free money which they can then use to make profit out of commoners by issuing credit with interest. Nice.
Why did people who got into mortgage difficulties not get any help? Houses where reposed and people ended up on the streets.What good does that do when you have people living on the streets because they can't pay.All this sounds like one big con very diificult to understand except for the ones doing their devilish deeds.And of course your buying power is down due to the value of your money.Makes you wonder if Karl Marx was right this system shouldn't exist.Boom recession depression and wars.What a lousy way to run a society..
Terrible explanation because it omits THE VERY IMPORTANT PART WHERE THE MONEY IN YOUR POCKET BECOMES WORTH LESS. Quantative easing or "Money Printing" as it should be known, increase the money supply making the cash in your wallet less valuable. It is just a TAX on everyone.
Not true.
Not exactly, but getting there. The money wouldn't become less valuable if we actually spent the money and contributed to the economy, it's like recycling, you give money back into the masses and the money should pay for itself, if not more as people start businesses, have money to invent things/ideas, and spend their money consuming products.
The real problem here is that the most of the money is going to majority stock holders who prop up the stock market by trading. So the rich are trading stocks back and forth using free money making it look like the actual economy is thriving, when really it's just a few hundred rich guys making some deals, while everyone else has to work tooth and nail to make a living, meanwhile the money they earn is worth less because the banks just gave the rich free money to spend, but they don't really spend it, they hoard the money and keep it liquid instead of actually spending it on groceries or whatever. The money they get is more likely to be spent on things like investments, which eventually they say, "Trickles down." We all know that is bullshit now.
The reason why the money ALWAYS benefits the rich is to maintain their power, if the central banks didn't use QE, then many of the current biggest corporations would have gone out of business causing massive fluctuations and possibly economic collapse. That is exactly the problem though, the rich have basically trapped us into, "Obey us, or the economy will fail." The huge problem with this that we are essentially creating a bubble where most of the wealth is disproportionately falling into the hands of rich people who can't spend it fast enough in the right areas, governments and citizens alike become cash strapped and those cuts mainly only affect the poor and working class through cuts on social services, education, and healthcare, all things that regular people depend on.
Basically, unless the rich somehow stop loving money we are all screwed, and we will have to assassinate all of the rich cocksuckers who caused this situation, sucks, but it is the only way now, voting can only get you so far, sometimes violence is necessary, like the French Revolution.
+Led Zed No voting can get you very far....the problem is, working class voters read Murdoch-newspapera and watch Murdoch-owned Fox and Sky news, and as a result, they blame immigration and foreigners for their wages remaining stagnant for 35 years. For example, in the Brexit referendum, Voter turnout of those aged 18-25 was 34%....the problem is apathy and disengagement.
+Led Zed And QE isn't exactly free money that can be traded....it's an asset swap mostly involving government bonds, although there have also been some Mortgage-backed securities swapped aswell. Fundamentally, it's an injection of liquidity into banks, not an injection of capital. I agree with your overall point though.
NeptuneNexus
Huh? I said it was "liquid", maybe you missed the edit I made, also, don't government bonds/debt still mean they hold overall power? To me power and money are synonymous.
Can’t they print the money so we can add extra zeros to our notes and carry it in wheelbarrow like they did in Zimbabwe 😂 QE biggest pyramid scheme in history
...leaving aside all the mumbo jumbo explanations, isn't this QE the main cause of the high inflation we are in now? to me, explanations to the effect of "if this and that had happened after QE, we would not have inflation" sound like "communism has not been properly applied"
The rich get richer when QE electronic funds hit the markets, and then the poor get poorer as inflation begins. Two things are critical to the working poor and that is food and gasoline. They are our back breakers. They get hit hardest by inflation! In America they aren't factored into the inflation rate! Angry!
If they can print money.....they could give it to the poor..