Inflation and deflation 3: Obama stimulus plan | Finance & Capital Markets | Khan Academy

[@LECityLECLEC]

Sal Khan for President! Thank you God for Sal’s business videos!

[@RickyRoro777]

Now that we are very nearly back to 80% capacity utilization, I would really like to see an updated economic analysis. Thanks for the clear and concise explanations.

[@ianwilmoth]

This guy's powerpoint style is totally nuts. Fortunately he is very well spoken. If I just saw the picture I'd think this was the work of an utter loon.

[@abhinavitsmebellamy]

Really well explained. Thank you!!

[@thecubemaster]

Thanks Sal!

[@torchyboy1]

I really enjoy all of Kahn's down-to-earth educational videos, both for learning new things as well as brushing up on things I've ...we'll, majored in...I would like to add that in my opinion, any stimulus should be directed to the middle and lower classes that have a lower propensity to save, but contribute to a huge velocity in money. This added demand will enrich all, factory owners and workers, say, and with less borrowing, create the means for saving. Okay, okay, I'll run your country!.

[@machib77]

Can you make a video about how to estimate capacity utilization? It would be really helpful. Thank you.

[@Lucky7wins]

i have not even seen this video....but i can already say....keep up the explanations. p.s great job at explaining what the toxic asset buy out will do.

[@BennoTheDutch]

I have a few questions (not specifically for Khan but also the YT community), but first of all: I am not of the opinion that creating deflation is good for the economy. What is your viewpoint on 'natural deflation'? (where natural deflation is a declining CPI due to innovation & research) Sometimes I hear a stable inflation of 2-3% and some say even 8% is good. Does a stable inflation rate of 2-3% really benefit the people and not just the first receivers of the money?

[@alonelychild]

Hyper-inflation concept for me is when currency looses its transaction capacity, when people start to trade real goods instead. That can be avoided by indexation, or inflation hedging upon daily indexes

[@DonkeyGuy3]

Thank you sal

[@Durchbrechen]

oustanding !!!! Thank you very much

[@BigBruddah101]

Insightful stuff for sure.

[@tianya1389]

One factor should be considered is the reserve currency role of US dollar. Right now the debate on this has become more popular. What if most other countries lost confidence on US$? I do believe that the whole world has to be considered when discussing inflation since it is the world currency.

[@mosullivan511]

Good Video. The bigger potential currency event that is coming is when we have to continually increasing demands to bailout the derivatives market and Foreign countries stop buying our debt at which time we monetize, which has already began. That could be much greater than the stimulus and is the real threat those concerned with hyper infla are concerned about

[@DonkeyGuy3]

The next few year are over sal! NOW WHAT!

[@sparc5]

that's the next stage of the crisis, not what is happening presently. They can raise taxes, increase the reserve requirements, or even increase interest rates to combat this. The exchange rates and capital flows however are something of another story.

[@thoughtchallenge]

The stock market bubbles and the savings decline coincide with the advent of 401K plans. 401K plans began Jan. 1 1980. 401K plans tend to be blind shotgun approach to investing, worst yet it's difficult to take your money out. The next bubble is just beginning. Most people haven't a clue what the P/E ratios, Market Cap, or market share of the stocks they are buying. They just see a statement every 3-6 months. and call that savings.

[@sparc5]

government deficits = private sector surpluses. As in the great depression, people's balance sheets were repaired, they were able to save without decreasing GDP (paradox of thrift), and so after the war, americans found themselves in a much better position to spend. It wasn't only an export lead recovery, it was strong domestic demand also.

[@IBMua]

Pitty it's in such a poor resolution =((

[@econguy87]

which category does this video fall under in the playlist?

[@ChiragSonne]

When Barack Obama was President of United States he was really nice and remarkable black president! 🖤

[@MrVxtay]

great

[@sparc5]

Mouljran, the money supply changes aren't the only cause of inflation. You have to look at velocity of money also, as well as many other factors. For example if guys like you hoard gold, the price of it will rise (inflate) regardless of money supply. For a very good document examining the various theories of inflation do a google search for Causes of Inflation in Turkey: A Literature Survey with Special Reference to Theories of Inflation

[@alonelychild]

@30percentplusreturns Yes, that is correct. But bear in mind that private credit is also money creation. As matter of fact there are 800 trillions of dollars around in CDSs. The capacity of government to create money, compared to the private banking is minimal.

[@latewire]

Inflation is one thing, but what about creating yet another credit bubble and lengthening the recession? And what about Bernanke printing trillions of dollars? Isn't that significant?

[@dougo6883]

where can you find current capacity utilization numbers/graph? im referring to graph shown at 7:23.

[@knottednoodles]

i very much enjoy these videos. a question: if investment instruments have swollen the annual liquidity reserves used for speculation to over 8 times the annual global gdp, and most of the losses left to occur have to hit that sector, does that have any effect on where the stimulus is actually going.

[@tommydhammer]

The one thing the stimulus package has not done is stimulate the economy. Prior to the bailout money to the banks, the banks were lending more money than they were afterwards, the speed at which money circulated in the economy fell to the lowest level in 50 years and investment in businesses fell by over 25% AFTER the stimulus.

[@sparc5]

People are saving more/buying less these days pressuring companies to lower their prices in order to sell. Secondly, the amount of credit money flowing in dramatically decreased, and so far the fed hasn't printed enough money to cause hyperinflation at current lending levels. Theoretically the fed could cause hyperinflation should they choose pay for gov spending with printed money, or freak people out that they will do that people will buy fearing inflation comes instead of save prices rise

[@MrFredGSanford]

No savings? What about the people that maxed out their 401k's every paycheck? Is that not considered "saving"?

[@Durchbrechen]

> hat will increase the value of the dollar and is nessecary since the 80's. Now I understand better Hugh Hendry's point. He forsee deflation with a dollar rally, and he's bear on all other assets. I didn't get precisely his reasoning till now.

[@mikehershey32]

No. The value in the dollar is based off how much it can buy which is based off CPI. The point this guy is making is that if you print 1000 trillion dollars it won't effect anything as long as the money is locked in safe or someones mattress where it is not circulating. The added currency will not effect anything until people start using it. The % of capacity used increasing will indicate people are starting to spent their dollar, and would lead to inflation which he is worried about.

[@jgposner]

So, you said capacity utilization is at 80% and demand drops. The US will then print more dollars to increase demand to keep us our capacity utilization up. But didn't you say it was the worlds capacity utilization. Wouldn't it present a problem is the US is the only one printing money. Wouldn't it be better if the whole world printed money together so we won't have to be the only ones going into debt? Does this make sense?

[@alonelychild]

Khanacademy, what do you think would happen if the current bubble the FED is creating has to be burst by a shof of interests a la Paul Vocker? 20 somethint percentage year on short-term debt? To the real economy, taking into consideration the debased industrial base of US, the debt addiction and net interest costs in budget? Do you think a sovereign default is possible in the next 10 years?

[@alonelychild]

If I am not very much mistaken, during the Great Depression and WWII the Gold Standart was abandoned

[@kaberle71]

Nixon baby

[@Haliotro]

Ron Paul 2012... our only hope of fixing the economy

[@christianwong5068]

Haliotro 2019?

[@Sproge]

YES! The natural thing for people to do is save! That will increase the value of the dollar and is nessecary since the 80's. Bringing back the savings rate to 10% would be GREAT, however, the government KEEPS spending! How will that effect the dollar? Negatively! The government is devaluing the dollar with all this spending! Sure, we won't have hyperinflation now, but we will as soon as people start dumping the dollar because they'll see americans never pay back or save the money we've borrowed.

[@ThePeterDislikeShow]

How can you expect people to save when you rob them of 10-15% of their savings each year?

[@cesarvialpando3933]

Why the saving rate has to reach 10% when people cant borrow anymore?

[@ThePeterDislikeShow]

The problem is the weak dollar is discouraging people to save. I think this video missed this root cause.

[@alonelychild]

What is your name narrator of khanacademy?

[@samsteers8504]

Just blank out the inception of the FED and the financial crisis' that followed in the 20th century, and also the fact that the gold standard was being used properly since the 19th century not just 70 years ago.

[@kimyoohyeon]

0:43

[@DonkeyGuy3]

Sal it is almost at 80! Now what?

[@grimshawr]

Why don't you work for CNBC and teach America how to fix itself? We crave satisfactory explanations of what is going on! WE CRAVE IT I SAY!!!!

[@Lucky7wins]

maybe we had the worse inflation when we were on the gold standard, but remember that the President took all the gold from the american people, so infaltion was not measured with gold even though we had the gold standard. If the US people had their gold, inflation would have not been a problem.

[@cyndeetrek]

I could fix this economy, but my explanation and reasoning took 1553 characters. Guess we'll never know.

[@XESTISS]

@30percentplusreturns That is because you do not understand economics. That's why you don't buy it. Keep learning from Sal.

[@ThePeterDislikeShow]

people aren't saving because our dollar doesn't hold value. 1985 --- PLAZA ACCORD! Forced dollar devaluation.

[@Zander101084]

VOTE KHAN FOR PRESIDENT IN 2012!!!

[@eddycurrent85]

and u have a bachelor of arts from art history or something?

[@stellaconcepts]

Khan, You need to understand that when the dollar is dumped from reserve banks around the world, and the debt obligations of the US become exponetially increasing, that hyperinflation will set in. its not about whether people save or not, or nomial prices of goods - the world banks will set their USD into the market - hyperinflation... that happens when no-one wants USD - this isn't a normal economical cycle... thats the problem with these vids your doing.. its based on a normal contraction

[@xxbondsxx]

@alonelychild Sal Khan

[@BigDeanoSyd]

Keynes was one of the great geniuses of our modern age....YOU are not!

[@randomdude56]

ʇxǝʇ uʍop-ǝpısdn uı ǝʌǝılǝq ʇuop ı

[@libertyplayground]

This is so much Keynesian BS Learn some capital structure theory - you are treating GDP and capital as some big homogenous blob.