Hi Tim, Thank you for sharing your question. This is quite a complex topic, and tricky to cover all bases in these videos so it's great to hear feedback. Money is not used by the central bank to purchase the bond. The asset they exchange with the "high street bank" for the bond is called a reserve (like a credit on that banks account at the central bank). Yes, the central banks balance sheet expands - as it adds both an asset and a liability. But most importantly the high street banks balance sheet does not change (it only exchanges one asset for another). This is the crux of it. There is therefore no change in the amount of cash in circulation - what we know as money. As the total assets in the the banking system do not change. Hence no money is being created any more than, say, if someone sold one asset and bought another. Some may argue that reserves are money. But they are not. Money has three characteristics. It must be a medium of exchange, a store of value, and a unit of account. Bank reserves are not a medium of exchange, as only registered banks can hold reserves at the central bank. This credit cannot be used by the bank to buy anything out in the real world. The only way this reserve can create money is if that bank uses this "credit" to then make a loan - which creates both an asset (the loan) and a liability (the deposit) on its own balance sheet. But that is an entirely separate decision for the bank to make. We will continue sharing our insights as time goes on, so keep your eye out for more videos. Thanks, CB

Hi Bhime, We're glad you found this helpful. We'll continue to share our best insights in the coming weeks so keep your eyes peeled. Thanks, CB

Hi Peter, Thank you for taking the time to share your feedback. You're absolutely right! Our intention here is to simply share our knowledge with people. There's a lot more to choosing the right KiwiSaver provider than KZbin videos! Take care, CB

Thanks Chris, it's important for us to take note of the lessons learned in the GFC, but also look at what is different in this down turn. The banks, of course are in a very different position than they were in 2008, so certainly worth highlighting. We'll be sharing more of our insights in the coming weeks so keep your eyes peeled. Thanks CB

Hi Richard, Thank you for getting in touch to share your insights. While coronavirus is new, dramatic changes in financial markets isn't. Historically markets have recovered from world wars, famines, the global financial crisis and other pandemics. Our view remains the same; pick a fund that best suits your goals and don't make knee jerk reactions based on what's happening right now. We have a helpful FAQs page online in case you've not yet seen it: fisherfunds.co.nz/newsroom/market-commentary/coronavirus-faqs Thanks, CB

Hi there R, Lovely to hear from you. Time frame certainly plays an important role when it comes to investing. It can be unsettling to see the value of your investment decrease sharply but as you say markets do recover eventually. Thanks, CB

Hi Willie, Many investors are feeling uneasy about seeing the value of their funds drop. KiwiSaver is designed to be a long term investment to help members save for retirement, which is why you can't simply withdraw it without meeting certain criteria. Most people have a long investment timeframe which is why we're encouraging people to make good decisions based on their goals rather than impulsive ones based on fear. Investments aren't designed to only increase in value, a drop in the market offers a lot of opportunities to investors who are exited to learn how to make the most of their savings. Thanks, CB

The fund would never recover if we panic and remove our funds. I'm thinking.

Hi Mr Purple, Thank you for getting in touch. It's good to hear feedback, as you can imagine it is very difficult to provide insights of explanations that are inclusive to everyone. Investments are expected to rise and fall, and there's never been a time where the market fell and didn't recover. Historically investors who have panicked and made dramatic changes to their accounts based on what's happening in the market at the time rather than their goal have often put themselves back a step. This is because they've sold their investment at a lower price than it was worth when they could have waited for things to bounce back. Furthermore, people often choose to move back in to their original fund when markets recover and the prices have increased again. While markets are falling investors have a wonderful opportunity to buy shares in strong, profitable companies while prices are incredibly low. Of course, if something fundamental has changed, or if you didn't have an investment strategy in place to start with then please do contact your provider for some guidance. It's important that you understand your investment and have the chance to make the most out of it. Cheers, CB