Quantitative Easing | Marketplace Whiteboard

[@marketplaceAPM]

SUBSCRIBE to our channel for more economic explainers! kzbin.info

[@tboned5641]

The FED is NOT Uncle Sam, it is an oligopoly of bankers.

[@raportmercado1165]

ur blog, web site, or something?

[@pauldarlington5589]

1:45 "You can't bring the rate down to a negative level" Oh yeah? Just watch that madness unfold eleven years later.

[@RipDon7]

I came here to see this comment.

[@Kuzyapso]

We once lived in a world where negative interest rates as a joke

[@m3528i]

Paul Darlington perfect exchange! Thanks all

[@trollface1994]

@@RipDon7 and i came here to see this one.

[@arlo5407]

I was just writing this comment until I noticed it was already here hhh

[@TopherVexel]

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.

[@tiendoan1333]

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

[@15past2]

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!!!

[@vinm300]

This guy is the best.

[@Coffee-Candy]

In addition, it would discourage other countries to store and hold USD as reserve currency.

[@Erikpdx]

@@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

[@stevenwortham225]

Where were you bro when I was in school......that was an excellent explanation

[@ToxicVaccines_HivHoax]

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.

[@katiejoxox]

@@ToxicVaccines_HivHoax Brrcccncsvcryvdvr fshbhgrafbvv vvcz b b in N 🎥📹🔶🔳🔳🔷👷🚐🌽🙃⚛️⛹🏾🌳🍃🍥🥧🍥🙋🏾‍♂️🙋‍♂️🛵🚟🏍📶🏧♏️♐️☦️🎸🪕⭕️🍓🥦🥔🌽🍆🌋🍇🦮🥕🍆🈲🈹🅾️🇦🇮🇦🇮🛤🍥🔳♉️⚛️📳🥔🛎🎖🇲🇷🚩

[@yannbenmaissa1828]

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 !

[@mireillelebeau2513]

After reading on quantitative easing for a month, I finally understand what it is

[@JohnDoe-gc1kt]

Do you feel like this is a great example

[@BoomBubbleBustRepeat]

ME: You Can't bring a rate down to a negative level. FED: HOLD MY BEER!!

[@darling8741]

They already have in other countries..

[@nh4nd0]

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!

[@niktroublemaker5669]

I always been told that QE is printing more money. Never understand how that helps the economy. Until now. You are the best!

[@HowardBPerer]

I've been studying this all day and his explanation is the best I've seen!

[@m8uwut]

"You can't bring the rate down to a negative level..." XD

[@ulicesmora783]

could not be any more helpful and simplified. thank you.

[@antonioroccabianca777]

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.

[@islandaerial3414]

2019: Please re-do some of these tutorials please!

[@YusukeFTW]

A very clear and factual analysis of the situation. Bravo, good sir.

[@amineaiffa]

I come from 2019. When he said you can't go to zero.... oh my friends....thats exactly where we are going.

[@clopez4280]

Gota pull your money out b4 2020 elections

[@mrmustangman]

@@clopez4280 i dont have any TO pull out...

[@CosmicSeeker69]

@@clopez4280 you might want to do that before mid January 2020...

[@clopez4280]

@@CosmicSeeker69 ... who's predicting that?

[@agusal4487]

Pull your money out of what? The market, the bank, the mattress or all of the above?

[@AhmedEtman79]

11 years old, still the best explanation ever of quantitative easing.

[@justme-ux6xo]

Yes

[@wesleyguan6833]

the video was created in 2008, but it will be helpful forever! thx for your amazing explanation.

[@justobserving7545]

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. :)

[@magedawad3649]

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.

[@DJJimmy30.]

these videos are from back in the day but hey they explain the concept very well. thank you!

[@sergelachapelle7992]

Ah, finally an explanation that makes sense... by someone who really understands it.... Thank you

[@finarrykahn13]

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!

[@tombot64]

Wonderful explanation. Thanks guys. Expecially you Mr. Neeson.

[@petersydney6303]

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 👍😀

[@jfawcett101]

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.

[@riskfreetaco]

Best explantation of QE on KZbin and I've watched countless. A 2009 video... 🤔 Thank you!

[@nateisawesome766]

2008

[@Agingisachoice]

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 :)

[@bobseaver7807]

Jay Warshavsky I have the same question

[@carlosmascarenhas4905]

Incredibly clear explanation, much appreciated!!

[@dianacamelia2426]

Hey! Your explanations are great. I wonder if you have a order of watching your videos to get the right information step by step?

[@theobradley5926]

So clear and concise. You will never be a politician Sir!

[@001rahulsingh]

This the first time i understood this term QE....thanx..

[@erbenton07]

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

[@anastasiamelachrinos6530]

A very clear explaination of Quantitative easing ! good job !

[@_Mikekkk]

Finally some simple clear explanation.

[@jessicarichards3220]

Thank you so much! This was super helpful and it really summed it up for me perfectly!

[@billbutler9862]

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.

[@mariochristofi6102]

Thank you mate!! Love how simplified and animated your examples are. Finally i get it!

[@veronicaalessandrello1022]

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. kzbin.info/www/bejne/jILdd2WNbbhjatE kzbin.info/www/bejne/pKHCqp-smJ2NoJo

[@saxonhomeboy177]

By God, that was immensely complicated. Thanks for the simplified explanation.

[@TheLuckyhands]

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?

[@williamevansstevens]

Quantitative tightening

[@marlopainter8246]

It puts the bag in the taxpayer's hands... ie... not their money.. ;)

[@inderjit124]

So this is how banks get free money and we borrowed money from bank pay interest like slaves.

[@freedaemon1458]

Yh. Except it's not even real money....

[@Erikpdx]

It's not free money. The banks have to give up valuable assets in exchange for cash. They get to lend out the cash, but they lose the cash flow from the assets they have to give up

[@Stewiehleba]

@@Erikpdx Banks don't lend cash. They create cash by making a loan.

[@Erikpdx]

@@Stewiehleba fair enough. But there are limits and in order to increase the reserve for loans, they have to sell assets to the Fed

[@Stewiehleba]

@@Erikpdx not really. Canada has 0 reserve policy. Their banks work the same way.

[@oanairani41]

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!

[@bokhodirturaev]

You cracked it. I am fond of your method of teaching

[@Dr_Augustus_MD]

Excellent and well done video explanation of what quantitative easing is. This is Fed Chief Bernake's latest attempt [folly] to stimulate the economy.

[@jaquinblanc]

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.!

[@learningwisdom5161]

You're amazing. Thank you for creating these types of videos!!

[@Katkayz]

Thank you for explaining this complex topic

[@Gazolineboy]

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?

[@Parksey01]

This is the best explanation of qe i've ever seen, and i've seen alot.

[@Zantorc]

Didn't work because instead of lending banks speculated on asset prices which is why we've seen a rise in gold and other commodities. Now in desperation the government in the UK is trying to engineer a house price bubble. We've had QE1, QE2, QE3 and QE4 even the man who invented QE says it isn't working and it's not going to work. Neoclassical economics is fundamentally wrong and 5 years have been wasted proving it. It didn't predict the crash and it will only make it worse.

[@TanmayPatil37]

Austrian economics ftw

[@vesperita11]

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.

[@parzrelmuzik]

EASY AND CLEARLY EXPLAINED

[@ru42112]

And here we are in November 2019 same thing. Banks won't even lend to each other. Now we got hidden quantitative easing.

[@brv1111]

Bloody excellent sir. Thank you for explaining in laymen’s terms.

[@rakkitb88]

What a goldmine channel this is. Thank you!

[@philipmorgan5500]

My my my. How times have changed. Check out what was said at 1:45 in the video. Paddy. Now you have to explain how negative interest rates work.

[@vicenterivera69]

You are the best explaining this!

[@sam4403]

This is GREAT!!! thank you so much! I was having a lot of trouble, and you couldn't have explained this better!!

[@wuanitamoore5041]

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?

[@yakkyuu12]

As dated as this is--EVERY single investor and STUDENT of Finance --this should be MANDATORY watching, learning and YES --- there will be a TEST! If you do not get 80% competency on passing the test of this video---- you JUST KEEP REPEATING it --- until it is INGRAINED in your mind!~

[@nandishvpatel2602]

Finally I understand QE! Thanks :) KeepSmiling

[@loveormoney786]

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.

[@bernie5995]

great explanation though, I was having trouble understanding it, now I get it. Thanks

[@HurricaneDane]

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.)

[@Annie-mi2cf]

Amazing content. Clear and very easy to understand

[@vanguardas9927]

Man I love your videos. 10 years too late I suppose. I was still in middle school 10 years ago.

[@waynecmontgomery]

Great video !!! After showing this to high school students. I now need a drink.

[@dlo5640]

best explanation ive seen yet

[@percy832]

Thanks. Good simple explanation.

[@johnyossarian9059]

I know this is an old video, but I'm hoping somebody can confirm my understanding of the concept. Mr. Hirsch said in the video that the government buying treasuries will drive down the yield. Does this happen through an increase in the price of the treasuries driven by higher demand? If that's the case, then Barry the banker is not being forced to sell the treasuries he has already bought. He is being incentivized to sell because the price of the treasuries is now higher than what he has paid for them. Did I get it right?

[@Unprotected1232]

The biproduct of QE is excess reserves. Since reserves are by definition a liability of the central bank and an asset for those with an account at the Central Bank (Namely commercial and business banks as well as credit unions and the government.) Transactions are done when bank A get its balance increased and bank B get its balance increased by the same amount. This means that reserves circulate in a closed system and won't leave it unless tere is a change in demand for cash, transactions made by the state and open market operation. Bored? well the conclusion is that this special money of uncle Sam won't run rampant and cause Weimar 1923 when banks start lending again as long as the central bank removes excess through its open market operations. (source Om pengemengden 2013. Sorry it's in Norwegian but the bank of England has a similar paper published in its quarterly bulletin Q1 2014. The basics of central banking is mostly the same. Only main difference is the interest rate corridor and reserve requirements. Reserve requirements are generally low and easy to bypass or in the case of Norway, England, New Zealand Australia and a few more countries nonexistent. America as far as I remember has a 10% on transaction deposits only. Other requirements and regulations are usually copy and paste from the Basel accords.)

[@econmax2634]

I just wanted to point out that the interest rate can go to negative, for example Sweden and Switzerland. Otherwise, very good explanation.

[@BinHexOctal]

Yea and in 2019 QE = stock buy backs not capital investments that grow the economy.

[@williehawaii9967]

That’s not qe you idiot. That’s from profits

[@Erikpdx]

The Fed is not buying stocks. However, buying up assets from banks may allow the banks to lend more money to corporations that, in turn, do buy backs

[@devondevon4366]

excellent explanation of quantitative easing

[@DylanDupont]

if inflation is running at "5.5 %" and the Treasury is yielding 2%, how is he making money? Should he not be incurring losses???

[@LoffysDomain]

2:00 Etymology _and_ financial education, love it!

[@delskitchiwa]

Love this guy and his Chanel.

[@DemonKingTyler]

QE4 then QE Infinity followed by a Gold and Silver Standard.

[@Tweetogreggieb59]

2 thumbs up good and reliable content From this host consistently videos recommended.

[@PermacultureHomestead]

wow 5 years later and were still using QE... nice vid

[@ericvinck1322]

Perfect explanation!

[@Ector521]

@APM Marketplace Thank you for your video. What kind of books on Finance would you recommend to read?

[@stokedfish]

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)

[@LT-tg4vf]

Wow, are you still here mate, its been 11 years. Cant believe how fast it is, right ?

[@jackhuang6750]

Excellent lecturer

[@Hypercube9]

I'm not sure what your point is? I was just trying to clarify what is meant by "economy" and how a pump analogy could be applied. Also, that the economy is NOT a zero-sum game. "money doesn't generate resources" Not sure what you're talking about here either. Money IS a resource. Money can also be used to hire people who can be considered a resource. Also, it takes money to drill for "natural resources". So I'm not saying you're wrong, but can you explain what exactly you're talking about?

[@starplatinum2008]

excellent explanation, taking into account the human part.

[@jackflash8756]

At last I understand QE . But I've heard that BOE has to pay about £40bn in interest back to the banks when they purchase those toxic assets. But I'm wondering whether that £40bn is added to the National Debt considering the UK govt owns the BOE? I've also heard that the UK are the only one of a few countries who pay this interest and that Switzerland and European Central Bank do not do this. If that is the case , why can't the BOE stop paying this £40bn ? According to Rachel Reeves, the UK government has a Tory inherited 'black hole' of £22bn but wouldn't that become an £18bn surplus if the BOE stopped paying this £40bn interest?

[@DylanDupont]

40 straight years of growth and its not allowed a market correction?

[@nickbagnall]

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.

[@DarkFaken]

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

[@NormanBauer]

Great explanation of QE the only thing it left off was why it will fail. Because QE does not address the real problem, credit worthiness. It only addresses the symptom.

[@AmodMallya]

money and credit are 2 different things. Bernanke said that the money is not actually printed but is transferred electronically into the banks. So his explanation is that if the money is not actually printed, it won't devalue the currency. As of now, only 3% is in the physical form as far as i know. So if in case, there is a bank run, banks would be out of cash in no time and would therefore ask the fed to print the money so that its customers could withdraw it.

[@notJafar]

How does purchasing securities in the market lower the yield of the bond?

[@funkmeister111]

thanks for the explanation... i have a better understanding of QE now...

[@xxczerxx]

I know this is aimed at the Fed's QE programme, but it's important to distinguish this from the ECB's QE-- as far as I'm aware, they were squarely buying government bonds from the secondary market, injecting liquidity into capital market and...well, not much at all for the real economy. Then they started buying investment-grade corporate bonds, again a huge benefit to massive corps but not general society. Fat lot of good it did, the programme hasn't even finished yet and the Eurozone economy is already seriously dipping! These were the Public Sector Purchase Programme (PSPP) and Corporate Sector Purchase Programme (CSPP). There were other programmes before this (covered bonds and ABS) but they seem marginal in comparison.

[@AbcdEfgh-sq2tf]

"You cant bring the rate down to a negative level" Bank of Japan -There's where you're wrong kiddo

[@abdulhassan1201]

yes, I do indeed need a drink!! nice explanation. !!

[@lemonadeez]

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?

[@astrallite67]

Wasn't the housing bubble caused by underwriting mortgages? So by underwriting derivatives and buying them up, rather than lending this new money to the public, isn't the bank's incentive just to invest more money in derivatives since the federal reserve will guarantee to buy them?

[@jaakkooksa5374]

QUESTION: This seems to state that when the FED funds rate is close to zero, banks are unwilling to issue business loans, even though businesses are willing to loan, because loaning to businesses at a low rate means that credit risk makes loaning unprofitable for the banks. That being the case, shouldn't the interest rate of those loans automatically adjust (rise) to a level where supply (banks) meets demand (businesses) so that lending would occur? To put it another, why can't interest rates of banks loaning to businesses rise appreciably higher than the FED funds rate, so that loaning would be profitable to banks?