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@kanegami41763 жыл бұрын
inflation is not good for grouth, inflation decreases the value of your savings, if lets say you have 100$ and a loaf of bread is 1$ at 2% inflation you will no longer be able to buy 100 loafs with 100$ just 98, how can people being able to aford less stuff be any indication of grouth
@kingslead83693 жыл бұрын
@@kanegami4176 Inflation is for the purpose of people having reason to spend it rather then save it. This is most pronounced with the rich. Also, inflation was never really considered good per say, it was just better then deflation and the nearly impossible challenge of no inflation.
@kanegami41763 жыл бұрын
@@kingslead8369 a measure against the rich that strikes against the poor, the rich will always have most of their money in things like gold or real estate and inflation only makes them more money, while the poor and middle class are forced to spend every penny on things they mighnt not realy need otherwise in a few years their hard earned money will be worth a lot less
@kingslead83693 жыл бұрын
@@kanegami4176 While that may be true to a certain extent, the rich still like easily liquefiable things such as money to spend on their interests and meals. It's a ridiculous thing that some of them seem to think that something can increase in price without the buyers getting more power to buy such things. This means wages need to increase, or the products price need to decrease, or else we get the prime mortgage bubble that popped in 2007-2009, otherwise known as the Great Recession. Just because they keep it in assets doesn't mean those assets are 'safe' investments, so they have to spread out those investments. Besides that, those investments can and will help facilitate job growth, although the lack of trust that the economy will continue to grow might lead to investors not spending their money, and in those times for governments to step in to spend for all those that aren't: check out Keynesian Economics. I never said inflation was a good thing per-say, just that it's far better then deflation where companies could go out of business because everyone who noticed that that dollar you had before can buy something more today might mean you save it instead of spend it, which can really screw some companies over. Besides that, inflation does help companies cut wages during the recessions just by slowing the rate of growth, which can allow their to be more people working in the place of those cut wages, although that's not really a good or viable solution by any means. Government projects, such as building a road, or just spending more to replace the money lost are the typical best and most effective responses to such a crisis.
@ArthurVIIJuliusPendragon4 жыл бұрын
“You will never be paid to borrow money”. I guess you missed the danish bank offering negative rate mortgages then...
@Martlns4 жыл бұрын
How does that even work?
@ArthurVIIJuliusPendragon4 жыл бұрын
MattCog the bank is able to benefit from savings through international money markets so they said they wanted to pass on the savings to customers. More here: www.theguardian.com/money/2019/aug/13/danish-bank-launches-worlds-first-negative-interest-rate-mortgage
@Xalgucennia4 жыл бұрын
@@ArthurVIIJuliusPendragon So why would I ever pay back a cent of the money? Wouldn't the loan just disappear by itself? Wouldn't I just borrow the maximum I could and watch the money and just watch the money roll in? Basically get multiple free houses?
@Gee-xb7rt4 жыл бұрын
@@Martlns Most countries have tax breaks for mortgage debt, it was a Keynesian program that every one liked because the majority benefited from it. A centralized bank is still the government its not that different, just more streamlined because the tax department isn't involved. In the US, Canada, and Asian countries using the tax break has also led to a whole lot of money laundering through real estate, Europe doesn't have that problem because they limit the amount of property an individual can own, Europe could never produce a Donald Trump or Charles Kushner, they got rich off welfare for the rich.
@ArthurVIIJuliusPendragon4 жыл бұрын
Xalgucennia because loans have monthly minimum repayments with cause you to default if you do not pay them
@Jyval4 жыл бұрын
How to be a successful financial institution: 1. Crash the economy 2. Get the government to pay your dues 3. Get free money from negative interest rates 4. Threaten to crash the economy again if the interest rates ever go up
@DorothyGTyas4 жыл бұрын
*Hammer to nail: B•A•M ! ! !* 👍🤓
@SoeZ-M44 жыл бұрын
Im gonna try it burning all the forests of my countrie. Wish me luck
@unusuario51734 жыл бұрын
Has this already happened somewhere?
@J-IFWBR4 жыл бұрын
@@unusuario5173 well last global financial crisis maybe? althou Lehman brothers wasn't saved, most european Banks were saved by the state and they get negative interestrate loans from the central bank currently.. This wasn't a clever master plan from the beginning, but they just played their cards right, and rode along the wave.. So ya it pretty much happend already.. Cheers!!
@demigodgamez4 жыл бұрын
@@SoeZ-M4 Did you cause the Amazon Rainforest fires?
@easygoingdude99904 жыл бұрын
Watched the whole video and I'm no less confused than before I started lol
@scotland3694 жыл бұрын
1) everyone is too broke to buy houses 2) banks are paying people to take out loans to buy houses. That's the jist of Neg interest rates.
@ruthirwin82224 жыл бұрын
Me too
@Decatron24 жыл бұрын
Easy: The central bankers are essentially printing money and bringing down interest rates to push up the value of assets. If asset values keep increasing investors keep lending and the economy keeps "growing". But you cant print money and lower interest rates forever. At some point currency looses all value and becomes monopoly money. At that point many assets like bonds will become worthless (because its a fixed income asset). This is already happening to some extent but the central banks are printing even more money and buying bonds as fast as they can to prevent the market from collapsing utterly. Because of central bank interference in the market the value of assets are increasing even though the underlying real economy is going down the toilet. What this means is that the people who are currently loosing their jobs are also loosing all purchasing power on their savings. The cenral banks are essentially saving the rich at the cost of the working class.
@victorjohnson49714 жыл бұрын
You can borrow money @ 0% interest to pay off your debt Banks do not want that
@victorjohnson49714 жыл бұрын
@@ruthirwin8222 you can borrow money @ 0% interest to pay off your debt
@woobykal684 жыл бұрын
"people buy things they don't need with money they don't have"
@lordbunbury4 жыл бұрын
carlo fraiia to impress people they don’t like
@brynleytalbot7784 жыл бұрын
Lord Bunbury And that's sanity?!? Consumer economies were always a pipe dream with the reality check delayed time and again. Once the middle class totally collapses we'll get back to a friendlier society where debate emerges, once again, instead of a class deeming themselves right because they're professionals and above everyone else. Hence buying things to impress others they don't like with money they don't have. The entire ethos of being middle class.
@lordbunbury4 жыл бұрын
Brynley Talbot It's only after we've lost everything that we're free to do anything
@guilhermesartorato934 жыл бұрын
@@brynleytalbot778 If you allow me to make a sugestion, middle class doesn't need to disappear - its "mindset" needs. Actually I even read some random Internet user posting that the so-called "middle class" doesn't exist for real, but is just an academic abstraction fetishized by consumerist society under the sponsorship of 1% percenters who benefit from - and laugh at - the schism this "proles vs. outer-parties" thing causes.
@robinlillian94714 жыл бұрын
Brynley Talbot: It's NOT the middle class. It's the rich people, and the corporations they own. They have FAR more money than any middle class person. However, if the rich can get you to blame brown people or middle class whites instead, they win. Divide and conquer.
@Pezmage14 жыл бұрын
"250k for a house" *cries in California Bay Area*
@videogamebomer4 жыл бұрын
Its that or the valley
@donnyvu51534 жыл бұрын
Median salary in the bay area: 100k Cries the whole world.
@TempestRequiem04 жыл бұрын
*cries in Vancouver*
@atm19474 жыл бұрын
@@donnyvu5153 still not enough to afford a house even after 3-5 years of working and saving all your money bruv. The example in the video was 80k/year for a 250k house. Here it's 100-200k/year for a 1.1mil house.
@michal56424 жыл бұрын
@@atm1947 That is not even for a good house, more like for a two room house on the outskirts of the bay.
@video99couk4 жыл бұрын
I'm not a great fan of borrowing money. I paid off my mortgage early by overpaying whenever I could afford it. I don't have a car loan, instead I drive a 25 year old Toyota Celica (the world's most reliable car? It broke down once, about 15 years ago.) When we wanted an extension, we saved up and then paid for it. My credit card is configured for full automatic payment on due date. If I can't afford something, I don't buy it. It's a simpler way to manage finances.
@ryanpenrod18594 жыл бұрын
Thank you for being a good person. I wish there were more of us that didn't feel it was necessary to constantly over=leverage our finances.
@TheIdiotPlays4 жыл бұрын
Are you scotty kilmer? Joking aside, that is a good way of living. My brother does the same thing, though he works two jobs at the same time. And drives a 99 a3.
@video99couk4 жыл бұрын
@@TheIdiotPlays I would like to think my Celica is in slightly better shape than Scotty's: www.colin99.co.uk/mycar-2018.jpg
@paulfears3374 жыл бұрын
You need a mercedes 300d can pick one up under 2000 and they will run forever
@ultimatetadpole96074 жыл бұрын
Best way to be. I've worked with people paying credit car debt for like 20 years.
@AbdulGoodLooks4 жыл бұрын
Make a video about stock buybacks and how they affect the economy please
@gigiduru1254 жыл бұрын
They don't really. Stock buybacks are just a way of returning capital to the shareholders. Like paying a dividend but if the shareholders don't want to get taxed they don't sell and just keep the now higher price stock. Why would you believe companies paying more in dividends would affect the economy? It does however show that they don't have better ideas about what to do with the money right now.
@thetooginator1534 жыл бұрын
Abdulmajid Nasir - What did your mom keep reminding you? “Say please”.
@AbdulGoodLooks4 жыл бұрын
@@gigiduru125 How they affect the stock market then?
@AbdulGoodLooks4 жыл бұрын
@@thetooginator153 XD
@ArawnOfAnnwn4 жыл бұрын
@@AbdulGoodLooks By raising demand for the stocks. Companies buying up their stock is (almost) the same as anyone else buying up their stock. More demand = higher stock price.
@abraintrust4 жыл бұрын
Nothing makes sense anymore, but I’m sure we will be seeing negative interest rates on our savings and checking accounts before we see it on loans and mortgages.
@ihateyankees36554 жыл бұрын
The goal is to stimulate spending. They'll put negative interest rates on your savings and then attack cash to force people to constantly buy new things.
@Bob Jones They won't stop, their life is boring without constant 1 upping each other.
@dilberta60464 жыл бұрын
Brain Trust I'll never pay for a savings account. I'd be saying bye-bye to two major banks, so it seems like it'd behoove them not to let that happen. Since I'd be far from alone pulling my $ out and putting it elsewhere.
@fanoftheterror4 жыл бұрын
Can you do a video of how Healthcare for all would work economically in the US? How it would affect the US? How it affected other nations in the past and in the present? Downsides and upsides? Maybe compare plans of Bernie Sanders and Elizabeth Warren for Healthcare for all? Thanks!
@EconomicsExplained4 жыл бұрын
I plan to explore both of these candidates separately in future video's and will address healthcare when I look at Bernie.
@memyselfandI900014 жыл бұрын
is there another country the same size of US, it's split into federal states and has "Healthcare for all"? Also, what do you meant by "Healthcare for all"? Free healthcare for anyone with no conditions?
@fanoftheterror4 жыл бұрын
@@memyselfandI90001 Canadian style healthcare. I know that there are some downsides to it, but I'm not entirely sure if some candidates plans for nation wide healthcare would be the same as Canada's or diffrent.
@fanoftheterror4 жыл бұрын
@@EconomicsExplained thanks!
@asdaviqs59504 жыл бұрын
@@memyselfandI90001 And Brazilian state Healthcare
@TheCreator11974 жыл бұрын
"There will never be a time when YOU are paid to borrow money" "My plan is ruined!" haha ;)
@quazar50174 жыл бұрын
"But no economist ever expected them to ever exist in the real world." Real world: "We don't do expectations here."
@J-IFWBR4 жыл бұрын
=D very nice
@tacticalbondsh4 жыл бұрын
So we got negative interest rates, where's our FTL travel?
@EconomicsExplained4 жыл бұрын
I know which one I would prefer
@eustache_dauger4 жыл бұрын
Would that FTL technology still be subject to special relativity though? Hmm.. 🤔
@quisqueyanguy1204 жыл бұрын
Soon
@tkgwildfire53393 жыл бұрын
@@eustache_dauger The White drive doesn't. All it does it bends spacetime around it to speed it's apparent speed faster than light.
@victorliu56894 жыл бұрын
Hi Economics Explained. I'm a teenage enthusiast in economics and the humanities, and I absolutely love your channel. The way you explain everything is awesome, clear and concise, and the topics you address are very applicable when I read the news. You have helped me understand so much, your unbiased reviews of different countries... everything Keep it up!!
@yakzq8 Жыл бұрын
Not precisely unbiased, haha; loads of his videos - while great, have a very much Western bias.
@ivanl.18814 жыл бұрын
Just wanted to say, economics and finance were always the one topic that fried my brain. This channel is actually helping me learn it on more than the most basic level. Thank you!
@ioratv4 жыл бұрын
Negative interest rates ‘harm Swiss economy’ Deutsche Bank Sees Negative Rates Worsen Europe Banks’ Retreat I wonder what these headlines are
@Gee-xb7rt4 жыл бұрын
Deutsche Bank is an investment bank, an entirely different beast than a central bank. That article in Bloomberg depends on the reader's ignorance of how the finance infrastructure works, the guy Bloomberg is named after has a vested interest in you being confused. The US currently wouldn't have a negative interest rate because there is so much lobbying in DC by "too big to fail" investment/financial services banks. Ultimately you are the one sent the bill for all the public relations done by investment/financial services banks to confuse you. In the US part of that pr is to demonize the American central bank, the Federal Reserve. People get paid to launch conspiracy theories, "think tanks" at investment/financial services banks aren't coming up with better ways to loan money, they are coming up with ways to maximize profits at the consumer's expense. If you have ever been hit with a late fee because your due date changed that is what finance think tanks do, they rely on you depending on a regular due date and swap it out to collect that late fee.
@gentuxable4 жыл бұрын
I am verry sorry to be amused that a bank with such a history of controversies makes such claims. Even if I doubt it is a reinsurance that the contrary happens. As a swiss I stopped saving.
@Gee-xb7rt4 жыл бұрын
@@gentuxable Yeah, Deutsche Bank is notorious for being sleazy, I don't think most Americans know that though, its comparable to Bank of America and Wells Fargo in the US, if you don't have to use their services then don't.
@ioratv4 жыл бұрын
@@Gee-xb7rt I don't live in the US But how, why, when?
@seneca9834 жыл бұрын
Ironically, Deutsche Bank has been getting cheap credit partially because various investors have thought it's the German central bank and therefore safer than a regular investment bank.
@ihateyankees36554 жыл бұрын
People should be far more worried about this than they are.
@JohnDoe-gc1kt4 жыл бұрын
I agree
@slly42763 жыл бұрын
Yes, we should live according to our means. Banks are encouraging people to borrow so that people will always have to work to pay back the banks. This is the only way banks can survive.
@ricktasker82482 жыл бұрын
Your answer ends up being that no one can explain negative interest rates. Thanks for the honesty.
@liamcoffen55644 жыл бұрын
I'm an economics major and most concepts discussed on this channel I can understand fairly easily but I'll admit I had to rewind a bunch and put some thought into it for me to grasp this. Great job explaining such a trippy concept. Much love for this channel.
@L0stEngineer4 жыл бұрын
Thank you for these videos. As an aerospace engineer, economic was a freshman level class and the wierd magical reason on why I suddenly didn't have a job. Thank you for explaining it.
@rotters25564 жыл бұрын
You don't have a job as an aerospatial engineer?
@foty86793 жыл бұрын
I want to become an aerospace engineer!
@OopsFailedArt4 жыл бұрын
Beautiful job explaining this difficult concept. I'm in finance and have been having this conversation with my clients and your way of explaining this will be super helpful. Thank you!
@WildVoltorb4 жыл бұрын
Your clients are idiots
@therealnoodles76384 жыл бұрын
Fuk your clients
@OopsFailedArt4 жыл бұрын
Wow. Thank you internet. My clients are not idiots. They are fantastic individuals who are brilliant in their own respective field. A trader isn't an idiot because he doesn't understand quantum physics or speak 7 languages so why would those people be idiots when they don't understand finance?
@SergeMTL4 жыл бұрын
Outcome = Perpetual debt servitude in a cashless society for the plebs.
@aminelemam4 жыл бұрын
YES.
@AdamSmith-gs2dv4 жыл бұрын
Oh and let's not forget hyper inflation like we see in Argentina or Venezuela.
@rajasmasala4 жыл бұрын
I have to say thank you for your thorough explanation of economics. Your KZbin work is a very important counterpoint to the hardcore austerity advocates on KZbin like Visualpolitik.
@deathguarddavegoogley20224 жыл бұрын
Negative interest rates can’t go mainstream while physical cash exists. That’s why the authorities in many countries are trying to push us all into digital only cash.
@clubberlang5894 жыл бұрын
Death Guard Dave Googley Why Toyota Corona (Corona Virus 🦠) is utilised to instil fear in the every citizen from using cash as a means of trade. Furthermore, be aware if they could get us to abandon cash 💴 then they can close the branches and your money 💰 can be stolen either by deeply negative rates being adopted or a bank 🏦 bail in. Never loose cash and tell the store 🏬 who says only accept digital payment only, you hand them a bunch of coins.
@DaoQui4 жыл бұрын
My guess is that we are being driven to a cashless economy, where only a digital currency exists. Meaning you can't withdraw the money from the bank. In that case, negative interest rates come to play to force you to spend the money, because otherwise it will get eaten by said negative interest rates.
@bhanureddy20874 жыл бұрын
I learnt more in this video than my tenth standard economics 😓
@darealrulezbreaker94934 жыл бұрын
really? all i heard was blabla banks paying to banks blabla interest bla bank bank bank and then some alkehrl3aj342l43klk. not sure if i am stupid or this system is stupid.. but its probably both
@slappy89414 жыл бұрын
Yet in none of your English classes did you ever learn the difference between "then" and "than", did you, dumbass?
@bhanureddy20874 жыл бұрын
@@slappy8941 I also wrote more twice
@MegamanTheSecond4 жыл бұрын
this channel makes the global financial system collapsing before our eyes seem like its ok lol
@EconomicsExplained4 жыл бұрын
Say it with me “everything is fine”
@yt.personal.identification4 жыл бұрын
And when it all falls down, we know who will foot the bill.
@Kevin_Street4 жыл бұрын
If I understand you correctly, the reason many central banks have gone to negative interest rates is because their usual tool of keeping interest rates low or at zero isn't working. After years of keeping interest rates extremely low there are still many institutions and people out there sitting on huge piles of cash and not spending enough. So the central banks have decided to go past zero into negative territory to stimulate more spending.
@Helpie1144 жыл бұрын
Extremely interesting , thanks for the effort
@tomraines65544 жыл бұрын
Thank you, thank you, thank you! I was searching for a video for so long until you (my favorite econ yter) uploaded! Thanks!!
@nitishkumarjurel2414 жыл бұрын
Just a request, can you do a video on economy of Argentina?
@costa97vm4 жыл бұрын
Basically sucks, huge inflation, high debt, very high taxation, the government spent way more than its earnings, fascist politicians and politics and general misconception regarding basic economic factors, cheers mate from Argentina
@3of114 жыл бұрын
TFW you find a new KZbin channel you like and will be binge watching the back catalog all night
@jonatannystrom72034 жыл бұрын
If negative interest comes to us consumer’s wouldn’t that risk creating a loan bubble where everyone takes loans and saves money at home instead of at the bank
@switchplayer10164 жыл бұрын
No individual banks will still have there own loan rates. The fed rate is more or less the minimum they charge.
@pilchardpliskin93814 жыл бұрын
Not if the rate of inflation remains positive. Countries can also get inflation from having a large enough trade surplus.
@laurentstorchi2904 жыл бұрын
yes, there is an increased risk of a loan bubble. This will become apparent to the broader public when interest-rates go up again and it will become much harder to service the loans that are now (unnaturally) cheap.
@centreman37314 жыл бұрын
that`s why they force to cashless system.
@spacejunk21864 жыл бұрын
Why so you think politicians push for the abolishment of physical cash?
@creditbayauto4 жыл бұрын
Awesome video. I just found your channel a month ago and already your entire library. Keep them coming.
@EconomicsExplained4 жыл бұрын
Thanks for the support mate :) glad you enjoyed!
@xLuluffy4 жыл бұрын
Great Video! Why does the Japanese Yen appreciate against many other currencies? Shouldn't the currency depreciate since the Japanese government are printing a large quantity of Yen to pay for the government expenses? And aren't investors worried that the rising public debt of Japan may result in that the Japanese government will default on their debt in the future? Looking forward to your next video. Cheers!
@therealnoodles76384 жыл бұрын
the yen appreciate because of investors and speculators. It has nothing to do with Japanese government printing large quantities of yen. Although investors will take this into account, it has no direct impact on the value of the yen in the forex market. Investors don't care because Japan can never go bankrupt. It always pays back the bond and any interest the investors have earned. It issues its own currency as do the United States and US bonds are the safest in the world. It will only default if it chooses to do so, such as Russia in the 90's.
@IXPrometheusXI4 жыл бұрын
@@therealnoodles7638 How come it can't go bankrupt? If it never has to, why would it chose to?
@therealnoodles76384 жыл бұрын
@@IXPrometheusXI because of fiat currency. and modern technology. Steam can't run out of games to sell because they are digitally available. It doesn't have physical copies of games. It can choose to stop selling games. Equivalent to a government choosing to be bankrupt. Why would a government choose bankruptcy? For political reasons or political stunts.
@Jyval4 жыл бұрын
@@IXPrometheusXI Basically if they were to go bankrupt the situation would already be so bad it wouldn't matter what they were holding
@BlackTomorrowMusic4 жыл бұрын
Here's a simple economic concept. If you don't already have the money, don't buy it. I'm sure the economists will scream "Blasphemy!" at this.
@AnixCo19904 жыл бұрын
It’s time to end central banking and get the system out of the debt and death paradigm
@denisyu7834 жыл бұрын
Unlike ECB the Fed doesn't normally lend money to banks. It controls the interest rate via the Federal funds rate - the rate at which bank in the US lend money to each other overnight. When a bank accepts the Fed's money. it usually means that it has problems, so banks in the US avoid doing that.
@mudwader11984 жыл бұрын
Big fan. Must ask, where do you get your stock footage from? Looks amazing!
@tn15_4 жыл бұрын
Main point of negative rates in my opinion is money creation. Money cannot enter the economy unless a bank loans it. Even if the loan is written for say, -.5% over 30 years, that new money will circulate through the economy during that time increasing incomes to a much greater degree than the original nominal loss on the loan. Negative rates may actually be the psychological turning point to get the non-financial sector to go wild and actually borrow money at an increasing rate again. Although that may come with its own consequences.
@MetroAndroid4 жыл бұрын
Central banks are privately run by unelected officials and have the entire economy (print money, banks, all credit card/online transactions and payment processing) as leverage against politicians.
@huckleberryfinn65784 жыл бұрын
Fake News. Central Banks are not privately. Not even the FED!
@ednorton474 жыл бұрын
Inflation is not the increased price of goods. That is only a symptom of inflation. Inflation is an increase in the supply of currency that is in excess of the amount of goods and services that are available.
@konajonah Жыл бұрын
really credit card cash back is a negative interest rate, where you are incentivized to borrow money for short periods of time and paid an interest rate for doing so. I find it fascinating how this effectively plays a role in the yield curve, where borrowing money for different lengths of time can make borrowing that money either profitable or costly. and how borrowing money multiple times for a short period each time is cheaper/more profitable than borrowing money one time but for longer.
@MalcadorTheSigilite4 жыл бұрын
Can negative interest ever be a thing amongst us plebs? A possibility?
@coleweede19534 жыл бұрын
Pleblo native Americans are safe
@poxpower4 жыл бұрын
Yes if there was large deflation of the money supply. Then I could lend you 1000$ today and expect at best 500$ back in a year and it still would be a good deal, because there would be, say, 60% less total money in circulation, so the purchasing power of 500$ is now higher than the purchasing power of the 1000$ I gave you originally. This can't happen without massive government meddling though, I imagine. I'm not an expert no periods of monetary deflation, governments usually don't do it, because governments owe debts so they inflate the currency to repay less money. Deflating their currency would mean they owe even more money. Obviously if you were the guy who decided how much money you'd pay back to people, you would tend not to increase that amount haha.
@markschroter26404 жыл бұрын
@@poxpower The government is the dog, the banks wag it.
@ryntopps4 жыл бұрын
@@poxpower Then why would I lend you the $1000, instead just keep it and now I will have a $1000 at higher purchasing power instead of $500
@poxpower4 жыл бұрын
@@ryntopps yeah I guess you are right haha this wouldn't work
@DeanCheers4 жыл бұрын
Honestly great explanation of inflation/deflation, never looked at it that way.
@warbylpunkaz87974 жыл бұрын
Sometimes BS is simply BS --- Don't justify insane ideas.
@nathanmolver26334 жыл бұрын
The inflation and GDP growth relationship concepts are better explained with an AD/AS graph than with just talking
@petersmythe64624 жыл бұрын
The fact that we're seeing this AT ALL I think is evidence of deep, unsolvable structural issues that ultimately will be capitalism's undoing.
@petersmythe64624 жыл бұрын
Or more likely, lead to barbarism.
@sarathw57403 жыл бұрын
Thank you for the video. I watched many videos on this topic and this is one of the best and it answered most of my questions.
@KapnKetchup4 жыл бұрын
I really love your channel for a while but I think especially for vids like this a more visual representation on screen would probably help new viewers or those with less knowledge on the topic a lot.
@ThatGuy-y2c10 ай бұрын
It’s wild that everyone having enough money to live = prices get higher. What a crazy system we choose to live under
@davidbrewer79374 жыл бұрын
It is what happens when some clowns loose control of the money system then break the interest rate knob off at the lower end stop while trying to get the system back on the tarmac...
@appynoon4 жыл бұрын
LOL! great summary :)
@yildendelta67614 жыл бұрын
To say that savings interest will always be lower is most like true today, but it wasn't always. I remember when savings interest rates were Higher than interest rates on a loan, i.e. people would borrow $3000 for a car and let the $3000 in their savings alone. The difference was somewhere around 2%, so your savings would grow at a faster rate than what you were paying out for the car loan.
@raideveloper4 жыл бұрын
4:10 "but they don't want inflation to go up to 4%" brazillian laughs
@lucasatilano80084 жыл бұрын
Raissa Correia Brazil has pretty high interests in order to avoid more inflation
@luiza41424 жыл бұрын
Kkkkk triste a nossa realidade
@vicgamesvt96823 жыл бұрын
Basically negative interest rates is something that would go on if there was deflation but right now with a annual inflation rate we need interest.
@bitzs4 жыл бұрын
No one: Absolutely no one: KZbin: wanna see a banking video? Me: ... yes
@libertatusinperpetuum20464 жыл бұрын
It has always fascinated me that people want to talk all day about their assets, about economics, bank rates, money markets, LIBOR, mutual funds, stocks, savings, etc. etc. When the VAST majority of these people haven't yet realized that what they own and everyday call "money" is not money at all. They own and trade in fiat currency and call it money when in fact what they own is DEBT issued by a central bank. Why would people use debt and call it money? Because they have been programmed to believe that way, thats why.
@RobertMOdell4 жыл бұрын
Propaganda trying to defend this horrific crime. It is a sin that will be severely punished.
@J12H4 жыл бұрын
HOW TO create armies of slaves.
@MeGawOOt994 жыл бұрын
For financial institutions to offer negative interest rates means their financials services are not being used thus they have to attract people from taking loans. The problem with this is foreign investors see this as a bank is going down or at least has no future when the bank can't give the investors a return. I mean in the EU the financial market been so bad the EU central bank started making their own funds mainly to prop up their Euro. They also made rules that any financial institution within EU must promote these funds first before anything else. So if your a German your only option is buy funds to prop up the Euro or buy gold and silver. Since last month Germany made laws that if you have more then $10k worth of actual gold and silver, you must disclose your name, address and which institution where you keep your gold/silver. As an investor, you can guess why a government wants to list of all the privately held gold/silver assets of normal citizens.
@centreman37314 жыл бұрын
the legal law that allow bank to rob money more!!!
@BipinRamachandran4 жыл бұрын
A thought: isn't Japan the least likely economy to spur consumer demand via -ve (or low for regular people) interest rates? Rationale: Japan is the land of retirees. They have the highest elderly population ratio. With fewer children being born and highest life expectancy, this is not going to change anytime soon, in fact it is very likely to worsen. Traditionally, retirees depend on investment returns of predominantly debt based portfolios for their expenses. When they see their investment returns goes down by say, 90% (e.g. deposit return goes down to 0.3% from 3%) will they be more inclined to hold on to what they saved and spend as little as possible?
@Zytaco4 жыл бұрын
Hi the bank, I'm dad.
@EconomicsExplained4 жыл бұрын
Hi dad I am the senate!
@jiaweike35184 жыл бұрын
Negative interest rates existence is a real example that proves that money is useless. Once you enter the mind of people that have a lot of money you may eventually realise that with all that money you accumulated it still can’t allow you to have whatever you want in life; since the perception of what is considered valuable varies around the world.
@vovacat17974 жыл бұрын
Hmm, paying someone to look after your money sounds intuitive to me. I mean, if money is safe there, isn't it worth paying for?
@aresgood14 жыл бұрын
oh. you think it's safe. cute
@vovacat17974 жыл бұрын
@@aresgood1 Maybe it's not so much about safety, but about transferring that responsibility of keeping the money to someone else.
@christripodi70714 жыл бұрын
So basically an accountant you pay them to look after your money
@samuelthornton91794 жыл бұрын
@@aresgood1 there would be bigger problems if the government defaults
@thelaw35364 жыл бұрын
Inflation alone makes money not safe if their is no growth to it. With negative interest you will be losing money on top of inflation not to mention how anything that has a positive yeild will be better than putting your money there. The banks use your deposited money for business and if people get paid to borrow, it stands to reason eventually large amounts of people will borrow. Would you like .4 percent of 300k euros for free? There are plenty of ways to spend store cash for safety purposes. Even us Treasury bonds are a better alternative.
@nomobobby4 жыл бұрын
Here's a question, if the big boys get hit hard with something - rising oil prices, embargoes, etc. What happens to the steady stream of bonds? The governments in question still need people to buy their bonds but with a negative yield the average investor won't buy enough of them- potentially causing a financial crisis. Seems like it really depends on big corporations being able and willling to fund their respective governments. If they go down what happens to the bond market?
@saritar10004 жыл бұрын
No views... 6 likes... Seems legit.
@aresgood14 жыл бұрын
yeah... they are counted on different servers. the one who counts the views takes longer to update cause it works with bigger numbers
@Sukerkin4 жыл бұрын
Nice work :thumbs up:. My first degree was in Economics and the fascination of the subject has never left me :).
@iliketobewithpeople98214 жыл бұрын
Stop like uploading at 9:45 pm thx bye.
@TheCaid1004 жыл бұрын
Do you really like social interaction?
@iliketobewithpeople98214 жыл бұрын
@Togos Na70 Ever heard of a joke?
@kaloyan27784 жыл бұрын
Right.. the difference being that faster than light travel is something that has to do with the actual inner workings of the physical universe. And a negative interest rate is a number written down on a piece of paper.
@EconomicsExplained4 жыл бұрын
Hi Guys I hope you enjoy the new Video :) I will be answering questions on here for as long as I can keep up with the comments. I will also be hanging out and chatting live on the new discord server that you can join here: discord.gg/TjWDPAA Otherwise please like and subscribe if you enjoy :D
@shubhamsehgal23364 жыл бұрын
Please enable captions sir. Thank you for explaining :)
@vojack52834 жыл бұрын
Great video, would you be able to make one on fractional reserve ratios and credit? and how it all ties back to inflation?
@AlejandroRodriguez-se4ue4 жыл бұрын
Hey, great work, keep it up! I wanted to suggest you make videos on the economics of the American health service and if it could be feasible to make it free like some of the candidates say or not. Maybe taking money off their military budget would suffice? How can you make sure the hospitals don't start charging a lot more, effectively bankrupting the system? Also, another video could be: how do health insurance stays in business? I'll elaborate on that: my home insurance is basically playing the odds that, although they have 1 million paying customers, only a small fraction of those will ever need to make a claim, since not all of them will need to repair their home (unless in Pompeii :D). Health insurers have a 1 million paying customers and ALL of them WILL need health services, or they'll die young, which will make them not that profitable, considering the lots of monthly payments they will not do. So how do these companies stay in service without denying service to their clients? Once again, thank you for making these topics more comprehensible!
@happyblueconsort31064 жыл бұрын
Hi, Love your vids. Are there any theries on how our living standars could look like if all countries became somewhat developed and exploitation of cheap labor force could not be done? Is something like that sustainable or do we need to keep "using" other countries to maintain our western lifestyle? Would love to watch a video on this *wink wink*
@electroninja87684 жыл бұрын
"Extremely secure assets like government bonds." Glares at the UK, waiting for their response. >.> Cool video btw.
@IOUaUsername4 жыл бұрын
It's not just economists and accountants who use future values. In engineering we do the same thing backwards, called net present value, to weigh up future maintenance and operating costs of machines and structures vs the original investment.
@samiraperi4674 жыл бұрын
Inflation isn't a given since production costs go down which should lead to prices decreasing.
@jmbpinto733 жыл бұрын
Some time ago, i found my book of financial mathematics from the nineties. It says there "negative interest rates are not possible". I smiled alone to the book. Is not that "we are paid to borrow" but we had the chance to refinance home loans to much better rates than we had.
@SoomNou4 жыл бұрын
Negative interest rate will add the Value to money which it has lost over long period, whatever you could buy for £100 will now be buy for £99.7, banks will no longer be required to print more money. Its a same principal that your house cost more in 10 years, but from now reverse, the money will cost more then house. Food and living will be lot cheaper! It good news for bank that they don’t need to worry about managing our money by doing bad and riskier investments leading to global recession when bubble burst, instead they can charge us small money like using them as vault.
@SupeHero004 жыл бұрын
Thank you! Awesome video :)
@uknowngamer10174 жыл бұрын
Great video idea: What if no one in a country owed debts? How would the economy be? Would it boom or sink?
@Zereniti774 жыл бұрын
I know a guy who had a negative mortgage. He had negotiated a really good margin on his loan and tied it to short-term Euribor. As interest-rates went down, his interest became negative. These days banks do not offer mortgages that are tied to short-term Euribor, 12month Euribor is the norm. But that can be very low as well. Interest on my mortgage is 0.13 at the moment.
@randeknight4 жыл бұрын
I had a mortgage rate that was tied to 1% higher than the standard rate. And then in the early 2000s the standard rate dropped to 2.5% and the mortgage company said "I am altering the agreement. Pray I do not alter it further', and left it at 4.5% no matter how low the standard rate went. Since I was close to paying off the mortgage, I didn't bother switching, but it sucks that banks can just unilaterally change contracts but the consumer can't do the same.
@qwertyuiop-cu2ve3 жыл бұрын
Negative interest is when the banking world has finally gone completely nuts.
@mikemancuso25264 жыл бұрын
Old Europe is senile!
@gcg29274 жыл бұрын
You’re missing some fundamental concepts of credit, debt and inflation Central banks oversee credit creation and therefore inflation, they do this through the banking system and the creation of money Banks do not lend money they purchase securities Professor Richard Werner explains this best Thank you for the video
@52darcey3 жыл бұрын
Well explained video ...although you mention and imply banks borrow money from central banks - which is not what happens in general. Private banks have the power to create money themselves when they lend money - they do not need to borrow funds, they create them.
@aviksaha27463 жыл бұрын
Negative interest would boost growth but at the same time check should be kept for alternative currency and land holdings prices.
@KoDeMondo4 жыл бұрын
MANIFESTO OF WORLD ECONOMY 1. Finance is subject to the needs of the real economy. They are decided by political action, respecting the superior moral values, since the center of economic activity is man and no longer the market. 2. The coin returns to be public. It can only be issued in the economic system by a public central bank, which for no reason can be independent of governments, parliaments and expressive bodies of popular democratic power. On the contrary, the central bank is explicitly subject to public interest and control with the aim of pursuing human growth objectives, full employment, social well-being, in contrast to any austerity policy. The top figures of the monetary direction are no longer nominated by the financial elite but elected according to the democratic representation of the sovereign people. 3. The state, regardless of the international agreements to which it intends to adhere, cannot abdicate the political and independent exercise of both fiscal and monetary policy. These policies must not have budget limits where expansive and counter-cyclical economic actions are necessary, dictated by the supreme need to achieve full employment and the protection of inviolable human rights, among which certainly the right to a healthy, long, free and dignified life. 4. The international financial system must once again be divided between banks that finance families and businesses and banks that play on the stock exchange. The action of the state, also through public banks, is concentrated on the first type, whose purpose is to operate to protect credit and savings. For no reason public money can be used to save speculators, nor is it possible to drag savers and their families into disasters resulting from the banking game. 5. Each country is free to adopt exchange policies consistent with its own needs, in order to combat globalization patterns that hide, behind the liberalization of goods and capital, the globalization and trade of human beings. 6. The free countries of the world implement legislation to prevent the substitution of governments by multinationals, opposing their legal, fiscal, economic, financial and media power. In no way are interference's of the big business banks tolerable in the economic assets of the free countries, and in this sense the states oppose the dumping, tax evasion, unfair competition, the exploitation of labor carried out by multinationals that attempt, with their actions, the economic and social dignity of peoples, their health or their freedom. 7. The objectives of the country's economic policy are no longer measured by the cold logic of numbers, but by warm indicators. Among these, the growth of private savings, the health of citizens, the rate of education, access to free information, the level of public health, the quality of research and quality of life, birth rates and support for the procreation of the human species. The aim of humanistic economics is to bury the capitalist one as an accident in history, bringing man back to the center of the market, work instead of capital, the value of things instead of their price, and ultimately what it is worth living in the place of what is to be exchanged. 8. In order to guarantee the respect of these inviolable and sacred principles and to sanction anyone, both in the public sphere and in the private sphere, by means of actions aimed at violating them, an international tribunal is set up, with a popular jury, against financial crimes. Anyone who, in compliance with alleged need for efficiency, puts in place actions of transfer of wealth from the poor to the rich of the world, accumulating undue fortunes, will have to answer to that tribunal of his own inequity. 8. In order to guarantee the respect of these inviolable and sacred principles and to sanction anyone, both in the public sphere and in the private sphere, by implementing actions aimed at violating them, an international tribunal is set up, with a popular jury, against financial crimes. Anyone who, in compliance with alleged need for efficiency, puts in place actions of transfer of wealth from the poor to the rich of the world, accumulating undue fortunes, will have to answer to that tribunal of his own inequity
@fft20204 жыл бұрын
5:04 deflations problems are much much worse that people stuffing cash under the mattress This video is very very simplistic
@fft20204 жыл бұрын
@Matt Sickle Deflation is only a problem when you are indebted to the core Which in our modern society means almost everyone
@myscreen2urs3 жыл бұрын
Aren't negative interest rates just disinterest rates? -"What's the interest rate?" -"Meh 🤷"
@eltanodelcassa4 жыл бұрын
TFW two of the three versions of the Argentinian 100 pesos bill appear on the video
@methos-ey9nf4 жыл бұрын
That flash to Star Wars was too fast!
@traynice96334 жыл бұрын
Is it a good time to invest or wait a bit longer?..
@immortalsofar53144 жыл бұрын
Take into account banking fees and the little guy has been dealing with negative interest rates for some time. At the end of the year, tally up all of your banking fees, subtract any interest they've paid and compare with the zero you would get for a sock under the bed. Most people would come out ahead with the latter.
@MrLordHenryWotton3 жыл бұрын
The explanation becomes a bit blurry from 7:55 onward. The question asked is "Why would people loan money at a negative interest rate?". However, this question had seemingly already been answered. The answer given was essentially: "Central Banks do it to increase inflation". So it's confusing that this question is then brought up again. The answer which follows is even more confusing as it is an entirely different one from the one given before: "Because it is cheaper to buy negative yield bonds than to deposit the money at the central bank at a negative rate". The concept of negative yield bonds has never been explained before and it's entirely unclear how it relates to the rest of the video. It is never explained why negative yield bonds exist int the first place. Everything in the video leading up to this is about central banks loaning money at a negative interest rate to banks. Now, suddenly, we are told about banks buying negative yield bonds from governments. This is basically banks loaning money at a negative interest rate to governments and thus the exact opposite of what the rest of the video is about. However, it is being presented as though one follows smoothly from the other.
@blueheavenfx14374 жыл бұрын
would have been good if you had covered what countries did go for negative rates and the short term impact so far, maybe you can revisit it since bank of England is considering and will most likely act on it during the crash of 2021
@cinzafenix084 жыл бұрын
Cool cheers from Portugal 🇵🇹
@404Anymouse4 жыл бұрын
I came here hoping to learn why the big banks DON'T JUST KEEP THEIR FREAKING MONEY and this video just brushes it off as "they have waaaay too much money".
@Pyrrhic.4 жыл бұрын
If a low interest environment isn’t stimulating the economy, maybe the economy is deleveraging or requires fiscal stimulus. Borrowing from the future means you will have to pay it back in the future. Thus the money you borrowed better have made a good return or you’ll be stuck in reduce spending to pay back debt
@christopherdukes80554 жыл бұрын
Thanks guys, I can't help but wonder if low interest rates spur inflation but ULTRA low interest rates actually cause deflation?! If everyone can borrow money and start a business that artificially increases competition and in this case, competition reduces prices faster than increases from consumer spending.
@darkmatter47682 жыл бұрын
How negative interest rates affect the cash collateral pledged for OTC securities and why do the large institution agree to pay negative interest for cash pledged
@SMunro4 жыл бұрын
Negative interest (banks paying a central government to take their money) amounts to increased interest on others borrowing from banks (inflation).
@therealnoodles76384 жыл бұрын
Idiot. Negative interest for banks mean they are paid in advance for getting bank reserves.
@nickvandop39164 жыл бұрын
Great informational videos. Rly getting into your channel lately