He WAS The BEST (and only?) REAL economist in this WORLD? No longer? No ‘BAU’? ‘Most’ ‘economic thinking’ is ‘short run’ and ‘redundant’? ‘It’ ignores the ‘supply side’? ‘Growth’ {and ‘civilisation’} depends upon ‘cheap’ F.F. - those so called ‘halcyon days’ are ‘over’. ? “The crisis now unfolding, however, is entirely different to the 1970s in one crucial respect… The 1970s crisis was largely artificial. When all is said and done, the oil shock was nothing more than the emerging OPEC cartel asserting its newfound leverage following the peak of continental US oil production. There was no shortage of oil any more than the three-day-week had been caused by coal shortages. What they did, perhaps, give us a glimpse of was what might happen in the event that our economies depleted our fossil fuel reserves before we had found a more versatile and energy-dense alternative. . . . That system has been on the life-support of quantitative easing and near zero interest rates ever since. Indeed, so perilous a state has the system been in since 2008, it was essential that the people who claim to be our leaders avoid doing anything so foolish as to lockdown the economy or launch an undeclared economic war on one of the world’s biggest commodity exporters . . . And this is why the crisis we are beginning to experience will make the 1970s look like a golden age of peace and tranquility. . . . The sad reality though, is that our leaders - at least within the western empire - have bought into a vision of the future which cannot work without some new and yet-to-be-discovered high-density energy source (which rules out all of the so-called green technologies whose main purpose is to concentrate relatively weak and diffuse energy sources). . . . Even as we struggle to reimagine the 1970s in an attempt to understand the current situation, the only people on Earth today who can even begin to imagine the economic and social horrors that await western populations are the survivors of the 1980s famine in Ethiopia, the hyperinflation in 1990s Zimbabwe, or, ironically, the Russians who survived the collapse of the Soviet Union.” ?
No ‘BAU’? ‘Most’ ‘economic thinking’ is ‘short run’ and ‘redundant’? ‘It’ ignores the ‘supply side’? ‘Growth’ {and ‘civilisation’} depends upon ‘cheap’ F.F. - those so called ‘halcyon days’ are ‘over’. ? “The crisis now unfolding, however, is entirely different to the 1970s in one crucial respect… The 1970s crisis was largely artificial. When all is said and done, the oil shock was nothing more than the emerging OPEC cartel asserting its newfound leverage following the peak of continental US oil production. There was no shortage of oil any more than the three-day-week had been caused by coal shortages. What they did, perhaps, give us a glimpse of was what might happen in the event that our economies depleted our fossil fuel reserves before we had found a more versatile and energy-dense alternative. . . . And this is why the crisis we are beginning to experience will make the 1970s look like a golden age of peace and tranquility. . . . The sad reality though, is that our leaders - at least within the western empire - have bought into a vision of the future which cannot work without some new and yet-to-be-discovered high-density energy source (which rules out all of the so-called green technologies whose main purpose is to concentrate relatively weak and diffuse energy sources). . . . Even as we struggle to reimagine the 1970s in an attempt to understand the current situation, the only people on Earth today who can even begin to imagine the economic and social horrors that await western populations are the survivors of the 1980s famine in Ethiopia, the hyperinflation in 1990s Zimbabwe, or, ironically, the Russians who survived the collapse of the Soviet Union.” ? No ‘green’ solution? “The problem with both visions of the future - and the spectrum of views between them - is a fundamental misunderstanding of the collapse which has begun to break over us. This is that each assumes the continuation of that part of industrial civilisation which is required to make their version of the future possible, even as the coming collapse wipes away ALL aspects of industrial civilisation. Most obviously, nobody had developed even an embryonic version of the renewable energy supply chain which is the essential first step to turning non-renewable renewable energy-harvesting technologies (NRREHTs) into the envisioned “renewables” upon which the promised techno-psychotic future is to be built. That is, until it is possible to mine the minerals, build the components, manufacture and transport the technologies without the use of fossil fuels at any stage in the process, then there is no such thing as “renewable energy” in the sense which the term is currently promoted. “
@@kurtjohnston6620 He WAS The BEST (and only?) REAL economist in this WORLD? No longer? No ‘BAU’? ‘Most’ ‘economic thinking’ is ‘short run’ and ‘redundant’? ‘It’ ignores the ‘supply side’? ‘Growth’ {and ‘civilisation’} depends upon ‘cheap’ F.F. - those so called ‘halcyon days’ are ‘over’. ? “The crisis now unfolding, however, is entirely different to the 1970s in one crucial respect… The 1970s crisis was largely artificial. When all is said and done, the oil shock was nothing more than the emerging OPEC cartel asserting its newfound leverage following the peak of continental US oil production. There was no shortage of oil any more than the three-day-week had been caused by coal shortages. What they did, perhaps, give us a glimpse of was what might happen in the event that our economies depleted our fossil fuel reserves before we had found a more versatile and energy-dense alternative. . . . That system has been on the life-support of quantitative easing and near zero interest rates ever since. Indeed, so perilous a state has the system been in since 2008, it was essential that the people who claim to be our leaders avoid doing anything so foolish as to lockdown the economy or launch an undeclared economic war on one of the world’s biggest commodity exporters . . . And this is why the crisis we are beginning to experience will make the 1970s look like a golden age of peace and tranquility. . . . The sad reality though, is that our leaders - at least within the western empire - have bought into a vision of the future which cannot work without some new and yet-to-be-discovered high-density energy source (which rules out all of the so-called green technologies whose main purpose is to concentrate relatively weak and diffuse energy sources). . . . Even as we struggle to reimagine the 1970s in an attempt to understand the current situation, the only people on Earth today who can even begin to imagine the economic and social horrors that await western populations are the survivors of the 1980s famine in Ethiopia, the hyperinflation in 1990s Zimbabwe, or, ironically, the Russians who survived the collapse of the Soviet Union.” ?
Some commenters misunderstand Richard Werner. He doesn't promote QE as something we should aim to do. He proposes that governments with a sovereign currency can use it to fix a banking disaster, and he admits that this is a bank bailout and thus bad and creating moral hazard. If you listen to his wider work, he advocates that we need to stop banks from creating the boom and bust ecomomic cycles. He argues we need to stop loans for asset purchases, for example to finance the acquisition of a company, or to fund a large commercial property development. He advocates for more small regional banks who will loan to local businesses. Werner is not part of the corrupt establishment. They detest him for exposing their corrupt self interest. I detest the central banks and the too big to fail banks and so does richard.
Listening to this, it struck me that a key factor in determining if QE actually results in money being added to the real economy is whether the central bank buys assets from the non-banking sector or not. I’m still trying to wrap my head around the complexity of debt-based monetary systems, but I don’t see how the central bank swapping balance sheet “tokens” (i.e., bank reserves) for treasuries necessarily increases bank lending. Doesn’t it risk the opposite effect in that it sops up safe, highly liquid collateral (treasuries) that can be lent in repo and other transactions from commercial bank balance sheet?
A good indicator seems to be money velocity(nGDP/money supply). If money supply increases faster than nGDP, velocity goes down, and it indicates that either people save more(its doesn't look like it that much) or money circulates in ways that doesn't increase nominal GDP. Savings, buying used goods, real estate, land, stocks, bonds, etc.
Honest question, if banks shouldn't provide loans to consumers for asset purchase (vechile and asset finance) who should? I know he said outside the banking sector but won't that create a shadow, riskier, banking sector? I watched Princes of Yen again the other. Best financial documentary!
It would be non-bank financial institutions who would lend pre-existing credit(meaning in this case credit that financed more production upon creation), meaning that they would loan deposits. Maybe it could be FDIC regulated too, but it would have to be a separate set of regulations and rule from banks.
No, he is not full if it; RW explains fractional reserve banking very well, one of the clearest and most succinct I've heard. However, he is not addressing the problems and lethal consequences connected with the concept. QE IS a Ponzi scheme in that money early in the game is priced and valued more than later money. You borrow and spend dollars today that you don't have (and didn't earn) and pay back (if you do) less-valuable dollars tomorrow (or manana, well down the line). INFLATION (the growth of the money supply, NOT the increase in prices) punishes the poor who do not stand in the front of the line nor play the game), while the wealthy and connected pay themselves, bribe each other, and drink first (and deepest) from the trough. The ignorant (like Kamala) will claim that it is capitalism or corporate that is the culprit, but this is a DAMNED lie. It is pure theft of the monetary kind, with inflation the unheralded tax and the great UNequalizer. Look at when the money supply went parabolic, when the growth of the federal government became cancerous, when the debt rocketed into space, when the chasm between have and have nots became so apparent, when our industries were hollowed out. It's eye opening. THE flaw is that money is tied to nothing but a promise. When the Central Authority can loan or print without worrying about paying equal for equal, there is no governor to the system. Who cares? Put it on the tab, my man! And we all wonder how we've accumulated $35+ trillion in national debt? It's the "power" (the debt trap) of fiat currency, and it is killing prosperity. The evils it brings in its wake will kill the nation.
Richard Werner just speaks the truth about modern money creation. It’s almost exclusively a private bank credit system, which is not a force for good and must periodically crash and demand public funding. Which it gets. This is worse than bad.
Essentially the living man/woman is the source of all credit creation by virtue of a pledge(Hospital Birth Record?) and signature since there is no real money/substance pursuant to the June 5 1933, public resolution numbered 10 and the “Full Faith and Credit” clause. The fact that we are ‘banks’ albeit private, in our own right on par with member Federal Reserve Banks (see Proclamation 2039) should be a fascinating topic for future dissection.
Economic justice is when the individuals that made the bad decisions and then profited off of those bad decisions are forced to pay (and/or) go to jail. Banks/corporations failing never brings justice. But economic justice will never happen in our society.
QE should be at the individual, not financial asset level. Generous short-term unemployment benefits could be monetized by central banks, staving off profound social issues and also ensuring aggregate demand doesn’t fall too far, so systemic credit doesn’t fail and the economy can chug along while being somewhat impaired in the short term. Sovereign credit wouldn’t be impacted because there’d be an expectation of the economic cycle rebounding, cushioned by government supported consumer spending. Banks, corporations and securities would be bankrupted and their assets sold to new risk takers. Corporate failure should be perpetual, as a healthy symbol of risk taking and competition. This would be democratic capitalism.
Although this episode impressively presents the in-depth analysis of the money creation, there are serious problems with the logic of the QE. Prof. W said QE1 does not create inflation since the money given to a commercial bank remains in the Fed Reserve as a reserve credit to this bank. This money does not enter the real (non-bank) economy and therefore does not create inflation. This makes no sense since the QE money given to a bank in trouble cannot do any good for this bank unless this bank can, at least in part, use it for its day to day operation. If the QE money is to be helpful, it must be used for something and not only sit in the Central Bank as the untouchable reserve.
@Beaconism-Dollarism, I haven't watched the video yet, but your description is very clear. I suspect you're incorrect, because the Fed paid interest on excess reserves during those years, which acted as a substitute for commercial bank lending. During those years, lending into the real economy was muted, while lending for speculation was, as always, in full throttle. The interest on excess reserves rewarded banks for not doing productive lending and incentivized the banks to let those reserves sit and do nothing. The Republican Senator Phil Gram wrote an article towards the end of the Obama years making the case to end the interest on excess reserves policy.
In 2020 the Federal Reserve Bank discontinued Reserve Requirements for banks. It eliminated Excess Reserves. I'm searching for changes to commercial bank balance sheets.
There is a problem with the analysis of what caused inflation. I did not and I do not know people whose assets increased so that consumption increased causing inflation. Inflation is the imposition of liabilities on society forcing the transfer of assets to those who impose a liabilities. That impacts balance sheets by reducing equity that people in society have. Assets minus liabilities equal equity. Those who impose the higher prices - liabilities on society - receive an increase in assets while facing the same liabilities so their balance sheets show an increase in their equity. Higher interest rates by central banks signals the banking industry to impose liabilities on society with their higher interest rates. And that forces assets - cash/money - to be transferred to the bankers.
"You can't grow the economy without increasing money supply". Here we have the fundamental problem with the modern basis of economics. This is literally only true if you use the nominal dollar value as your metric of growth. You can of course generate more goods and services with the same money (that's called productivity gain). The chief reason that we need continuous growth in monetary supply is that every year a growing percentage of total available money is in the hands of a minority. Therefore we have to inflate the whole pie just so that the majority can stay relatively stable. This guy is a genius, but all of economics is lies built on top of misleading assumptions built on top of objectively false simplifications. Basically trying to solve economics through an economic lens is DoA
This dude explains money creation just like my late father-in-law John G Ranlett does...from an academic, extremely boring viewpoint. He is correct, but does not go into who started this con, and how they use money creation to control the world...Bill Still with his documentaries The Money Masters and The secret of OZ, and Paul Grignon's documentaries Money as Debt 1 through 4 explain everything a lot better and easier to comprehend.
Let me steal a few billions and say it’s just spilt milk. This guy is really full of sheeyet Smart but full of sheeyet Spent too much time in school with no wisdom
Right. Guy is full of sheeyet. Only if you are brainwashed can you buy this crap. No wisdom By his logic all the criminals steal billions and maybe trillions and he says well this is spilt milk. Let’s bail them out. As if the fed is not part of the government Yeah. Only in theory
Blaming the Regulators is just another incantation of “the better angels” theory. That is a hope and a prayer that this self-proclaimed “scientist” should get a firm grip on. He was a good guest but he is just another apologist for central planners.
Every developed successful economy had some form of central planning, including the United States. All Corporations snd businesses have central planning. That is the very essence of their business model. That is how they allocate resources, funds and labor within themselves. Can you imagine running a corporation that does not have central planning? If it works for the corporations why can't it work for entire nations?
Professor Werner, an absolutely brilliant mind. Please add additional interviews
He WAS The BEST (and only?) REAL economist in this WORLD?
No longer?
No ‘BAU’?
‘Most’ ‘economic thinking’ is ‘short run’ and ‘redundant’?
‘It’ ignores the ‘supply side’?
‘Growth’ {and ‘civilisation’} depends upon ‘cheap’ F.F. - those so called ‘halcyon days’ are ‘over’. ?
“The crisis now unfolding, however, is entirely different to the 1970s in one crucial respect… The 1970s crisis was largely artificial. When all is said and done, the oil shock was nothing more than the emerging OPEC cartel asserting its newfound leverage following the peak of continental US oil production. There was no shortage of oil any more than the three-day-week had been caused by coal shortages. What they did, perhaps, give us a glimpse of was what might happen in the event that our economies depleted our fossil fuel reserves before we had found a more versatile and energy-dense alternative. . . . That system has been on the life-support of quantitative easing and near zero interest rates ever since. Indeed, so perilous a state has the system been in since 2008, it was essential that the people who claim to be our leaders avoid doing anything so foolish as to lockdown the economy or launch an undeclared economic war on one of the world’s biggest commodity exporters . . . And this is why the crisis we are beginning to experience will make the 1970s look like a golden age of peace and tranquility. . . . The sad reality though, is that our leaders - at least within the western empire - have bought into a vision of the future which cannot work without some new and yet-to-be-discovered high-density energy source (which rules out all of the so-called green technologies whose main purpose is to concentrate relatively weak and diffuse energy sources). . . . Even as we struggle to reimagine the 1970s in an attempt to understand the current situation, the only people on Earth today who can even begin to imagine the economic and social horrors that await western populations are the survivors of the 1980s famine in Ethiopia, the hyperinflation in 1990s Zimbabwe, or, ironically, the Russians who survived the collapse of the Soviet Union.” ?
This is the best Richard Werner video I've seen.
No ‘BAU’?
‘Most’ ‘economic thinking’ is ‘short run’ and ‘redundant’?
‘It’ ignores the ‘supply side’?
‘Growth’ {and ‘civilisation’} depends upon ‘cheap’ F.F. - those so called ‘halcyon days’ are ‘over’. ?
“The crisis now unfolding, however, is entirely different to the 1970s in one crucial respect… The 1970s crisis was largely artificial. When all is said and done, the oil shock was nothing more than the emerging OPEC cartel asserting its newfound leverage following the peak of continental US oil production. There was no shortage of oil any more than the three-day-week had been caused by coal shortages. What they did, perhaps, give us a glimpse of was what might happen in the event that our economies depleted our fossil fuel reserves before we had found a more versatile and energy-dense alternative. . . .
And this is why the crisis we are beginning to experience will make the 1970s look like a golden age of peace and tranquility. . . . The sad reality though, is that our leaders - at least within the western empire - have bought into a vision of the future which cannot work without some new and yet-to-be-discovered high-density energy source (which rules out all of the so-called green technologies whose main purpose is to concentrate relatively weak and diffuse energy sources). . . . Even as we struggle to reimagine the 1970s in an attempt to understand the current situation, the only people on Earth today who can even begin to imagine the economic and social horrors that await western populations are the survivors of the 1980s famine in Ethiopia, the hyperinflation in 1990s Zimbabwe, or, ironically, the Russians who survived the collapse of the Soviet Union.” ?
No ‘green’ solution?
“The problem with both visions of the future - and the spectrum of views between them - is a fundamental misunderstanding of the collapse which has begun to break over us. This is that each assumes the continuation of that part of industrial civilisation which is required to make their version of the future possible, even as the coming collapse wipes away ALL aspects of industrial civilisation. Most obviously, nobody had developed even an embryonic version of the renewable energy supply chain which is the essential first step to turning non-renewable renewable energy-harvesting technologies (NRREHTs) into the envisioned “renewables” upon which the promised techno-psychotic future is to be built. That is, until it is possible to mine the minerals, build the components, manufacture and transport the technologies without the use of fossil fuels at any stage in the process, then there is no such thing as “renewable energy” in the sense which the term is currently promoted. “
The BEST (and only?) REAL economist in this WORLD
Check out Von Mises, Hayek and especially Rothbard
@@gustavfourie5099 Lol, yes their ideological presuppositions are so insightful.
@@kurtjohnston6620 He WAS The BEST (and only?) REAL economist in this WORLD?
No longer?
No ‘BAU’?
‘Most’ ‘economic thinking’ is ‘short run’ and ‘redundant’?
‘It’ ignores the ‘supply side’?
‘Growth’ {and ‘civilisation’} depends upon ‘cheap’ F.F. - those so called ‘halcyon days’ are ‘over’. ?
“The crisis now unfolding, however, is entirely different to the 1970s in one crucial respect… The 1970s crisis was largely artificial. When all is said and done, the oil shock was nothing more than the emerging OPEC cartel asserting its newfound leverage following the peak of continental US oil production. There was no shortage of oil any more than the three-day-week had been caused by coal shortages. What they did, perhaps, give us a glimpse of was what might happen in the event that our economies depleted our fossil fuel reserves before we had found a more versatile and energy-dense alternative. . . . That system has been on the life-support of quantitative easing and near zero interest rates ever since. Indeed, so perilous a state has the system been in since 2008, it was essential that the people who claim to be our leaders avoid doing anything so foolish as to lockdown the economy or launch an undeclared economic war on one of the world’s biggest commodity exporters . . . And this is why the crisis we are beginning to experience will make the 1970s look like a golden age of peace and tranquility. . . . The sad reality though, is that our leaders - at least within the western empire - have bought into a vision of the future which cannot work without some new and yet-to-be-discovered high-density energy source (which rules out all of the so-called green technologies whose main purpose is to concentrate relatively weak and diffuse energy sources). . . . Even as we struggle to reimagine the 1970s in an attempt to understand the current situation, the only people on Earth today who can even begin to imagine the economic and social horrors that await western populations are the survivors of the 1980s famine in Ethiopia, the hyperinflation in 1990s Zimbabwe, or, ironically, the Russians who survived the collapse of the Soviet Union.” ?
My thoughts exactly
Some commenters misunderstand Richard Werner.
He doesn't promote QE as something we should aim to do. He proposes that governments with a sovereign currency can use it to fix a banking disaster, and he admits that this is a bank bailout and thus bad and creating moral hazard.
If you listen to his wider work, he advocates that we need to stop banks from creating the boom and bust ecomomic cycles. He argues we need to stop loans for asset purchases, for example to finance the acquisition of a company, or to fund a large commercial property development. He advocates for more small regional banks who will loan to local businesses.
Werner is not part of the corrupt establishment. They detest him for exposing their corrupt self interest.
I detest the central banks and the too big to fail banks and so does richard.
Fantastic interview and a great primer on how the monetary system works and the ways in which policy affect it
Im so glad conservatives are coming around on this issue. The truth should be nonpartisan.
This guy explains it so well.
Best of the absolute best...
Listening to this, it struck me that a key factor in determining if QE actually results in money being added to the real economy is whether the central bank buys assets from the non-banking sector or not. I’m still trying to wrap my head around the complexity of debt-based monetary systems, but I don’t see how the central bank swapping balance sheet “tokens” (i.e., bank reserves) for treasuries necessarily increases bank lending. Doesn’t it risk the opposite effect in that it sops up safe, highly liquid collateral (treasuries) that can be lent in repo and other transactions from commercial bank balance sheet?
Check out Jeff Snider.
A good indicator seems to be money velocity(nGDP/money supply). If money supply increases faster than nGDP, velocity goes down, and it indicates that either people save more(its doesn't look like it that much) or money circulates in ways that doesn't increase nominal GDP. Savings, buying used goods, real estate, land, stocks, bonds, etc.
Honest question, if banks shouldn't provide loans to consumers for asset purchase (vechile and asset finance) who should? I know he said outside the banking sector but won't that create a shadow, riskier, banking sector?
I watched Princes of Yen again the other. Best financial documentary!
It would be non-bank financial institutions who would lend pre-existing credit(meaning in this case credit that financed more production upon creation), meaning that they would loan deposits. Maybe it could be FDIC regulated too, but it would have to be a separate set of regulations and rule from banks.
How can the regulators spot bad asset allocation in an environment of uncontrolled, unaudited derivatives?
Time for the Americans to force their hand and make these plunderers prove their claims of ownership.
Great video, we like the truth
Ok. He is spot on the rest of the video.
My apologies
No, he is not full if it; RW explains fractional reserve banking very well, one of the clearest and most succinct I've heard. However, he is not addressing the problems and lethal consequences connected with the concept.
QE IS a Ponzi scheme in that money early in the game is priced and valued more than later money. You borrow and spend dollars today that you don't have (and didn't earn) and pay back (if you do) less-valuable dollars tomorrow (or manana, well down the line).
INFLATION (the growth of the money supply, NOT the increase in prices) punishes the poor who do not stand in the front of the line nor play the game), while the wealthy and connected pay themselves, bribe each other, and drink first (and deepest) from the trough.
The ignorant (like Kamala) will claim that it is capitalism or corporate that is the culprit, but this is a DAMNED lie. It is pure theft of the monetary kind, with inflation the unheralded tax and the great UNequalizer. Look at when the money supply went parabolic, when the growth of the federal government became cancerous, when the debt rocketed into space, when the chasm between have and have nots became so apparent, when our industries were hollowed out. It's eye opening.
THE flaw is that money is tied to nothing but a promise.
When the Central Authority can loan or print without worrying about paying equal for equal, there is no governor to the system.
Who cares? Put it on the tab, my man!
And we all wonder how we've accumulated $35+ trillion in national debt?
It's the "power" (the debt trap) of fiat currency, and it is killing prosperity. The evils it brings in its wake will kill the nation.
Richard is very smart
Richard Werner just speaks the truth about modern money creation.
It’s almost exclusively a private bank credit system, which is not a force for good and must periodically crash and demand public funding.
Which it gets.
This is worse than bad.
Essentially the living man/woman is the source of all credit creation by virtue of a pledge(Hospital Birth Record?) and signature since there is no real money/substance pursuant to the June 5 1933, public resolution numbered 10 and the “Full Faith and Credit” clause. The fact that we are ‘banks’ albeit private, in our own right on par with member Federal Reserve Banks (see Proclamation 2039) should be a fascinating topic for future dissection.
👍👍👍
The power of the private bankers on money CREATION, "ex nihilo" lies on the ignorance of the people on the secrets of the banking system.
Economic justice is when the individuals that made the bad decisions and then profited off of those bad decisions are forced to pay (and/or) go to jail. Banks/corporations failing never brings justice. But economic justice will never happen in our society.
35:10 "somehow"
QE should be at the individual, not financial asset level.
Generous short-term unemployment benefits could be monetized by central banks, staving off profound social issues and also ensuring aggregate demand doesn’t fall too far, so systemic credit doesn’t fail and the economy can chug along while being somewhat impaired in the short term.
Sovereign credit wouldn’t be impacted because there’d be an expectation of the economic cycle rebounding, cushioned by government supported consumer spending. Banks, corporations and securities would be bankrupted and their assets sold to new risk takers. Corporate failure should be perpetual, as a healthy symbol of risk taking and competition. This would be democratic capitalism.
“Taxation is a free lunch” boy if that isn’t the truth. I refuse to gift/bequests them any more.
Although this episode impressively presents the in-depth analysis of the money creation, there are serious problems with the logic of the QE. Prof. W said QE1 does not create inflation since the money given to a commercial bank remains in the Fed Reserve as a reserve credit to this bank. This money does not enter the real (non-bank) economy and therefore does not create inflation. This makes no sense since the QE money given to a bank in trouble cannot do any good for this bank unless this bank can, at least in part, use it for its day to day operation. If the QE money is to be helpful, it must be used for something and not only sit in the Central Bank as the untouchable reserve.
@Beaconism-Dollarism, I haven't watched the video yet, but your description is very clear. I suspect you're incorrect, because the Fed paid interest on excess reserves during those years, which acted as a substitute for commercial bank lending. During those years, lending into the real economy was muted, while lending for speculation was, as always, in full throttle. The interest on excess reserves rewarded banks for not doing productive lending and incentivized the banks to let those reserves sit and do nothing. The Republican Senator Phil Gram wrote an article towards the end of the Obama years making the case to end the interest on excess reserves policy.
In 2020 the Federal Reserve Bank discontinued Reserve Requirements for banks. It eliminated Excess Reserves. I'm searching for changes to commercial bank balance sheets.
There is a problem with the analysis of what caused inflation. I did not and I do not know people whose assets increased so that consumption increased causing inflation. Inflation is the imposition of liabilities on society forcing the transfer of assets to those who impose a liabilities. That impacts balance sheets by reducing equity that people in society have. Assets minus liabilities equal equity.
Those who impose the higher prices - liabilities on society - receive an increase in assets while facing the same liabilities so their balance sheets show an increase in their equity.
Higher interest rates by central banks signals the banking industry to impose liabilities on society with their higher interest rates. And that forces assets - cash/money - to be transferred to the bankers.
"You can't grow the economy without increasing money supply". Here we have the fundamental problem with the modern basis of economics. This is literally only true if you use the nominal dollar value as your metric of growth. You can of course generate more goods and services with the same money (that's called productivity gain). The chief reason that we need continuous growth in monetary supply is that every year a growing percentage of total available money is in the hands of a minority. Therefore we have to inflate the whole pie just so that the majority can stay relatively stable.
This guy is a genius, but all of economics is lies built on top of misleading assumptions built on top of objectively false simplifications. Basically trying to solve economics through an economic lens is DoA
Everyone who I tell that banks create money out of nothing reply as if they knew this. If I ask them if banks can create money they say no.
This dude explains money creation just like my late father-in-law John G Ranlett does...from an academic, extremely boring viewpoint. He is correct, but does not go into who started this con, and how they use money creation to control the world...Bill Still with his documentaries The Money Masters and The secret of OZ, and Paul Grignon's documentaries Money as Debt 1 through 4 explain everything a lot better and easier to comprehend.
Let me steal a few billions and say it’s just spilt milk.
This guy is really full of sheeyet
Smart but full of sheeyet
Spent too much time in school with no wisdom
I've got an idea, let's send everybody 10 trillion dollars and let's pass a law that you can't have a recession. This is such a childish idiocy.
Thank you for the brief. I suspected modern monetary theory.
Clown world...
Some people work for a living, this guy sits around and thinks about how to wreck the civilized world.
He has empirically shown what the system and process actually is, are you anti-truth?
Right. Guy is full of sheeyet.
Only if you are brainwashed can you buy this crap. No wisdom
By his logic all the criminals steal billions and maybe trillions and he says well this is spilt milk. Let’s bail them out.
As if the fed is not part of the government Yeah. Only in theory
He has highlighted an aspect, but his galaxy brain has just created yet another progressive fix-the-world system.
Blaming the Regulators is just another incantation of “the better angels” theory. That is a hope and a prayer that this self-proclaimed “scientist” should get a firm grip on. He was a good guest but he is just another apologist for central planners.
Every developed successful economy had some form of central planning, including the United States.
All Corporations snd businesses have central planning. That is the very essence of their business model. That is how they allocate resources, funds and labor within themselves.
Can you imagine running a corporation that does not have central planning?
If it works for the corporations why can't it work for entire nations?