Quantitative Easing | Marketplace Whiteboard
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- Опубліковано 21 гру 2008
- If the whole idea of Quantitative Easing is confusing to you, you are not alone. Paddy Hirsch breaks it down in this economic explainer.
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To understand QE it's important to understand that it essentially entails the Fed buying bonds to keep interest rates down, encourage lending and stimulate the economy.
#QuantitativeEasing #Whiteboard #MarketplaceAPM
If the Fed does reduce bond buying short-term interest rates will likely rise. But the Fed doesn’t want the public to think that the Fed is raising the official interest rate. This is really difficult for the Fed because the point of bond buying is to keep interest rates low. Therefore it's logical that by buying fewer bonds the interest rates would go up.
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The FED is NOT Uncle Sam, it is an oligopoly of bankers.
ur blog, web site, or something?
1:45 "You can't bring the rate down to a negative level"
Oh yeah? Just watch that madness unfold eleven years later.
I came here to see this comment.
We once lived in a world where negative interest rates as a joke
Paul Darlington perfect exchange! Thanks all
@@RipDon7 and i came here to see this one.
I was just writing this comment until I noticed it was already here hhh
This is BY FAR the best explanation of quantitative easing I've found. It also explained why it's so risky, since the government is just eating "risky assets" like a debt collector. Long-term it can't be a solution, since the entropy (cost of risky assets vs value recovered) will eventually force a collapse.
QE is an unprecedented concept, and it is hugely controversial on whether or not it will work in the U.S
I'm excited to see what will happen in the future
Quantitative easing is a method for the privately owned Fed to give money, that belongs to the people, to their subordinates, the major banks, free money to buy off American and international companies and interests! To own and control YOU!
Its a scam and anybody who doesn't see that is swallowing fake matrix pill!!!
This guy is the best.
In addition, it would discourage other countries to store and hold USD as reserve currency.
@@15past2 the balance sheet isn't your money...it has nothing to do with taxes collected by the US Treasury.
The banks don't get it for free. They sell assets to the Fed.
You're full of conspiracies and empty on facts. Go watch the video again bro
Where were you bro when I was in school......that was an excellent explanation
QE is legalized cash counterfeiting.
It is a crime no matter who does it, even the Reserve Federal Bank, that is not Federal (it is a private bank) and has got no reserves.
@@ToxicVaccines_HivHoax Brrcccncsvcryvdvr fshbhgrafbvv vvcz b b in N 🎥📹🔶🔳🔳🔷👷🚐🌽🙃⚛️⛹🏾🌳🍃🍥🥧🍥🙋🏾♂️🙋♂️🛵🚟🏍📶🏧♏️♐️☦️🎸🪕⭕️🍓🥦🥔🌽🍆🌋🍇🦮🥕🍆🈲🈹🅾️🇦🇮🇦🇮🛤🍥🔳♉️⚛️📳🥔🛎🎖🇲🇷🚩
Your explanations are cristal clear and concise with recurrent use of analogies. I am a University Professor in Computer Science and I know what I am talking about ... You are much more than a Senior Editor. You should teach at the Biggest Universities, sir !
After reading on quantitative easing for a month, I finally understand what it is
Do you feel like this is a great example
ME: You Can't bring a rate down to a negative level.
FED: HOLD MY BEER!!
They already have in other countries..
could not be any more helpful and simplified. thank you.
Most epic penthrow finale on finance videosi have seen.
And by the way: Thanks! This is the most clear explanation of quantitative easing i have found of any kind of source!
I've been studying this all day and his explanation is the best I've seen!
Your videos are very important to me... the amount of knowledge transferred in such a simple manner is amazing. I never thought quantitative easing could be so easy. Thanks a lot and please keep it up.
A very clear and factual analysis of the situation.
Bravo, good sir.
I come from 2019. When he said you can't go to zero.... oh my friends....thats exactly where we are going.
Gota pull your money out b4 2020 elections
@@clopez4280 i dont have any TO pull out...
@@clopez4280 you might want to do that before mid January 2020...
@@CosmicSeeker69 ... who's predicting that?
Pull your money out of what? The market, the bank, the mattress or all of the above?
Thank you very much for your lesson: for the first time I understood the Quantitative Easing and my level of English is upper intermediate. Thanks again your lesson is gold to me. You have the gift for teaching, no doubt about it. Grazie. Antonio from Italy.
I always been told that QE is printing more money. Never understand how that helps the economy. Until now. You are the best!
Thank you mate!! Love how simplified and animated your examples are. Finally i get it!
Why is this video so much under valued to the public. People should be watcing this kind of videos so that the awareness will be increase. And can avoid mistakes in the future. The video looks super simple because he uses real examples with no difficult words involve. Great job for this channel. :)
"You can't bring the rate down to a negative level..."
XD
2019: Please re-do some of these tutorials please!
Very clever man you are because you not only have great knowledge but able to explain difficult concepts in a simple manner. Love your videos and working my way through all of them 👍😀
By God, that was immensely complicated. Thanks for the simplified explanation.
these videos are from back in the day but hey they explain the concept very well. thank you!
Ah, finally an explanation that makes sense... by someone who really understands it.... Thank you
Thanks, good vid. This seems to show that instead of decreasing the risk of loans from the bank the US has increased the risk of its Government Bonds.
Wonderful explanation. Thanks guys. Expecially you Mr. Neeson.
Thank you so much! This was super helpful and it really summed it up for me perfectly!
11 years old, still the best explanation ever of quantitative easing.
Yes
Incredibly clear explanation, much appreciated!!
This is the best explanation of qe i've ever seen, and i've seen alot.
This is GREAT!!! thank you so much! I was having a lot of trouble, and you couldn't have explained this better!!
Professor Randall Wray from the University of Kansas estimated that the federal reserve Bank has spent 27 trillion dollars since the great recession of 2008. One has to ask the obvious question! Why has quantative easing not worked?
great explanation though, I was having trouble understanding it, now I get it.
Thanks
Excellent and well done video explanation of what quantitative easing is. This is Fed Chief Bernake's latest attempt [folly] to stimulate the economy.
Hey! Your explanations are great. I wonder if you have a order of watching your videos to get the right information step by step?
the video was created in 2008, but it will be helpful forever! thx for your amazing explanation.
A very clear explaination of Quantitative easing ! good job !
What a goldmine channel this is. Thank you!
hahaha... love your unique signature at the end of your videos. Excellent! I have learned so much from you. The whole storyline is that we live in an era where no one trusts no one or anything. It's hard to understand how comes that living in a era of advance technology Humans still can't communicate properly. With no TRUST any transaction or relationship is pointless and as a result too risky. This is when a holistic and functional finance approach could end the chaos. No wonder why wall street traders end up like Buddhist monks. We must accept that the best options are to introduce a more holistic approach in finance to generate TRUST, we could start by ending economy colonialism, imperial WARS, and aggressive interventions with iligal economic sanctions to other nations that are trying to fix their own problems without the piracy threats. NO MORE WARS - NO MORE IMPERIAL COLONIALISM - NO MORE WILD CAPITALISM - NO MORE DENIAL!!!! WE MUST INVEST IN ****TRUST***** AS IN THE WARRANTY AND SECURITY THAT NO ONE ELSE IS A THREAT TO OTHERS. NO MORE PSYCHOPATHS DREAMING WITH THE DOMINATION AND THE ONE WORLD ORDER. NO MORE SECRETIVE SOCIETIES. NO MORE TAX HEAVENS. NO MORE SPIDER WEBS.
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Best explantation of QE on UA-cam and I've watched countless. A 2009 video... 🤔 Thank you!
2008
This is great! I really struggled to wrap my head around this concept, but I think I get it now!
best explanation I've found so far...good job
Bloody excellent sir. Thank you for explaining in laymen’s terms.
WOW. this is the first demonstration that actually made sense. If it isnt bad enough that our country is in the position of having to resort to quantitative easing, risk hyperinflation, and print money to revive an unsustainable economic model, now I have to have a foreigner be the only one who can adequately explain the process to by which my own government taxes me by denigrating my purchase power. THANKS!
So clear and concise. You will never be a politician Sir!
You're amazing. Thank you for creating these types of videos!!
Amazing content. Clear and very easy to understand
@APM Marketplace
Thank you for your video. What kind of books on Finance would you recommend to read?
Very good video.
It's all about the marketing really. Imagine we called a spade a spade, instead of Quantitative Easing, we used the term "counterfeiting". When it's QE, a gullible public focuses on CEO bonuses. Call it Counterfeiting, and you have a revolution on your hands.
This the first time i understood this term QE....thanx..
Great job explaining it out, really appreciated.
Great video !!! After showing this to high school students. I now need a drink.
Brilliant explanation! Thank you.
Thank you for explaining this complex topic
can you do a video on how the feds are getting rid of those toxic assets off their balance sheet? I have hard time understanding the concept. please :)
Jay Warshavsky I have the same question
Great, thanks. I'd love to see another clip about Qualitative Easing! "Qualitative easing is a shift in the composition of the assets of the central bank towards less liquid and riskier assets, holding constant the size of the balance sheet (and the official policy rate and the rest of the list of usual suspects)" (Financial Times definition)
Wow, are you still here mate, its been 11 years. Cant believe how fast it is, right ?
You are the best explaining this!
Finally some simple clear explanation.
Finally I understand QE! Thanks :) KeepSmiling
May be a silly question but what does "uncle same" do with the bad securities? Why would he want the ABS if they're so risky?
Quantitative tightening
It puts the bag in the taxpayer's hands... ie... not their money.. ;)
You cracked it. I am fond of your method of teaching
Perfect explanation!
Good video. The only issue here and it is a glaring one is of the topic of bond prices. You'd think the ultra low yields would decrease their demand but in the recent years that has not been the case. So much so that the yield to maturity on a lot of sovereign bonds is now negative. Bond prices go up as yields decrease and theoretically speaking the price of a bond can increase much further than the zero or even much more negative yields possible.
Thanks. Good simple explanation.
Fantastic explanation.
I am really dumb at economics though.
How does the government buying bonds lower their yield ?
Is it simply a case of a lower yield as a result of increased demand?
@mikejadoti actually if you want to get technical about it, the federal reserve isn't one bank at all, but a highly hybridized system consisting of classical government body (board of governors), twelve reserve banks (public-private hybrid), several private banks, and a few more details. The government body determines how much money the reserve banks can create, and the profit of those reserve banks is owned by the government. Yes, there are private components, but not quite how you imagine.
Hello, just found your channel...at the beginning of your video you mentioned you cant bring interest rates to 0, or negative. I guess they can and they will...interesting times!
Great explanation, one of the best, thanks.
Hi, Paddy, I had my drink , bit of red wine and french blue cheese. Your lessons are so nice and clear and easy and presentable. you should come to Kaplan singapore and teach Uni. Of Bedfordshire. Special lecturer. Most of my lecturers part time sucks.!
Hi Paddy, great tutorial what many beguile with complicated nonsense to confuse. The principle I understand however when Barry Bank lends? (commodities of exchange) [bills] promissory notes by way of loans to business or general customers in principle.
Thanks so much! this was a great help. I no longer need a drink, *picks up pen*
EASY AND CLEARLY EXPLAINED
I watched this as there is talk in Australia there will be quantitative easing measures put in place if they continue to lower the cash rate
2:00 Etymology _and_ financial education, love it!
great explanation! did qe work? did they loan businesses?
Please don't kill the messenger.
Great video. Thank you for posting.
It's good to understand about "danger of deflation" before watching this video.
Hi, there is something I'm getting confused.
First of all, the Federal cut the target lending rate to 0, does that refer to borrowing rate only between banks themselves, or banks can actually get loans from the Federal( central bank)?
Secondly, I'm not sure I capture the part from 5:50, if uncle Sam buying those toxic assets, why the yield goes down?
Can you please explain me a bit further, many thanks! I like your sets of videos, been very helpful. Looking forward to hear from you.
+Wang Bo (CNMLGB) Hii..
1) It essentially refers to both.. 2 kinds of rate- FFR and FDR..Fed Funds rate- rates banks charge each other for short term.. Federal Discount rate- borrowing rate from fed...
2) If Uncle Sam is buying these assets -> prices of these rise due to the demand created -> therefore the bond yields go down due to the price rise...
Hope its clear...
i have question is fed actually print money? people say it's done electronically? how is it used to buy things if it's not money. Bernanke said on 60 minutes said the money supply remained the same?
A great explanation of the theory behind QE, however, the reality is that the US has so much debt that an increase in interest rates means that the amount of debt owed will increase dramatically. By pumping money into the economy, the fed can keep those interest rates low, meaning we won't incur more debt through interest.
(But that doesn't really matter because our daily deficit is so high that the debt is increasing anyway.)
Love this guy and his Chanel.
best explanation ive seen yet
What time should we be watching it?
truly helpful. very informative n excellent presently. thanks very much for the post!
Man I love your videos. 10 years too late I suppose. I was still in middle school 10 years ago.
Nicely explained!
This guy rocks. Has he done any more videos recently?
when it is said that interest rate have been cut,then in what respect it is said and for whom the rate has been cut and by whom ?
@truthhawk7 oww ok that makes sense. Is there a limit on the number of owners and the percentage they own on these products? Going back to your example, can the number of owners keep growing indefinitely?
excellent explanation of quantitative easing
2 thumbs up good and reliable content From this host consistently videos recommended.
excellent explanation, taking into account the human part.
fantastic explanation sir, top class
Devaluing the dollar effectively raises prices for you and me. Your dollar is worth less and it takes more of them to buy a given item
does the fed lower the target interest rate by buying up all the T-notes or by just having the FOMC meet and decide on a low rate ?
How does purchasing securities in the market lower the yield of the bond?
Can someone please answer this question for me? If QE ends and bond yields spike, won’t this cause the value of the U. S. bonds that banks have been buying to decrease and adversely affect their balance sheets? Is that a major potential problem regarding the soundness of banks? I’ve heard different possible downsides to QE, but not this. Thanks.
would you mind including japan QE case?
First time in modern time, QE quantitative easing adopted in 2008 credit crunch. Severe Shortage of money in US banks .
It's aim was to Restimulate the Economy, Save Banking Sector with Special Consideration to Inflation.
thanks for the explanation... i have a better understanding of QE now...
5:53 why does the yield go down when the demand for t bills go up?
What's up with all the poindexters here..?
This guy does an excellent job on explaining QE in a way that non-economists MAY be able to understand.
And of course it's not totally accurate. What did you expect in 7:37 minutes, a full MBA class in advanced monetary policy?
yes, I do indeed need a drink!! nice explanation. !!