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"With the central bank simply crediting themselves funds" Must be fckn nice

“4 Trillion balance sheet is a lot!!” One year later: FED balance sheet 7.2 trillion

"Nothing is so permanent as a temporary government program." - Milton Friedman

Who’s here after the fed launched quantitative easing?

That was a superb overview. You went beyond the technicalities straight into the ACTUAL ramifications of the QE process. As usual, it is great to have a presentation that strives to be impartial at all times. And those animations...

It's at such an extreme amount now that the stock market looks exactly like the chart for QE

Thank you, Richard, for this explanation of "quantitative easing". On a number of occasions, I've tried to explain this subject to people -- usually unsuccessfully. Henceforth, I'll refer them to this video.

In my graduate program, one of my professors, who works for the Fed calls QE, Large Scale Asset Purchases (LSAP)s because the name is more reflective of what QE actually is. Love the channel, use it as a reference for a lot of Stock related questions! See you in the financial world soon when I graduate next week!

One of the most underrated financial literacy channels out there! Always great content 👍🏼👍🏼

QE is literally adding zeros to your account that had $1. Then having the Gaul to purchase real estate and other asserts with that fake money that you made up, competing with businesses and individuals who worked hard for that money.

Who’s here to prepare for the unprecedented financial crisis we’re entering in

Love how everything is broken down so beautifully! Thankyou for such elaborate explanations!!

boy oh boy what a clear concise video that predicts all your questions and answers them in short order.

This aged surprisingly well, and surprisingly quickly.. *cough cough* Oh excuse me, I have coronavirus

Running low on money? Printing more money will ease your problem.

politicians are so concerned with their image and they want to appear be "doing something" they never stop to consider that doing nothing may actually be better

Q: What is Quantitative Easing? A: Legalized counterfeiting.

I'm still wondering if the Japanese flag was just a transparent png of a red dot and no white background at all. Jokes aside, very straightforward and explanatory video :)

Thank you, Plain Bagel. Best explanation I have read or seen-- especially on why bond yields fall when QE is in motion. The presentation is balanced, fair-minded, and lucid. Nicely done.

Great video! I like that it quite specifically addresses the distinction between QE and standard expansionary monetary policies, something which even a number of news articles do not.

If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.

Awesome video, plain bagel! I feel like you did a great job explaining QE and some of the nuances involved!

I would highly advise looking into the economist prof richard werner who actually coined and developed the method of quantitative easing. He is very clear that all the countries who have used it have not used it the way it was intended or have used it in part while missing some important steps. He was also a leading economist in japan in the early 90's and has said that there is much more to the japan situation than quantitative easing policy. the idea coined by werner is that during a bust a country would keep things circulating while governments and banks fixed what caused the boom bust cycle in the first place. the policy is meant to circulate money while the banks and central banks deal with bad performing assets and make structural changes to ensure it doesn't occur again. This is where every country has stopped. The QE was never meant to be used for asset inflation because it is asset inflation and speculation that causes boom and bust cycles. The USA and europe etc use QE to re-inflate the bubble that just popped rather than using it to give the economy a breather while structures are put in place to make sure lending goes into productive means not speculative means like house prices, stock prices etc. check out the book princes of the yen by him, explains what happened in japan and why most of what we consider about banking to be true is false. particularly the notion that banks are intermediaries when they are credit creators and the notion that economies follow interest rates when interest rates only change in relation to economies and not the other way around. central banks have many more tools at their fingertips but they just won't use them for idealogical purposes. they don't need to use secondery bond markets, they don't only have to tinker with interest rates. these are all choices they make and don't make. Greenspan said it himself. its about "making people feel like they are getting wealthier so they will spend money", it's not about actually doing it because that might effect some of the big boys who expect their gambling to always pay off

Thanks for the great video! Just curious would you think Fed's recent operation in repo market considered as QE too, since they're also buying a bunch of treasuries?

Nice video, but a couple of things are off. QE can only increase reserve cash for banks and (as you mention) effect yield/interest rates, but has no direct, and in fact, no real long term impact on money in circulation (the “lower interest rates lead to more loans” theory makes logical sense, but never plays out in the real economy except in the short term) Because QE doesn’t increase money in circulation, it never causes significant lasting inflation. Ultimately QE is just an asset swap for banks which, in the case of treasuries, doesn’t change the size of bank balance sheets, only the proportion of assets in cash reserves. In recent years many central banks have admitted that interest rates don’t reliably or significantly impact the circulating money supply. This, in combination with the previous points, means modern central banks have almost zero control over the amount of money circulating. Only new bank loans, fiscal spending, and trade surpluses can add to circulating cash and therefore have the potential to cause inflation. The Fed could literally buy every financial asset from every bank (the theoretical maximum QE) and inflation would stabilize to basically where it was before they did it within a couple of months. In fact, since in theory the banks would be losing all the interest payments on the financial assets, inflation would likely end up a bit lower than before. The true crime of post 2008 QE is that the Fed bought bad or worthless assets from the banks at full face value, while making non-banker “normal people” eat their losses. The banks then often took advantage of their improved balance sheets to seize distressed assets at way under fair market price... ultimately this was a massive shift of wealth from the poor to the wealthy. As you pointed out, the banks also chose to issue a significant portion of new loans to overseas projects at the cost of delaying the US recovery. As long as the FED restricts the assets it buys and sells to treasuries, there is no real danger to the normal economy. Banks today are never restricted in the amount of loans they can issue (and so the amount of new money they can inject into the economy), and will always loan to match their appetite for risk. Economic collapses happen primarily when banks systemically underestimate the risk on loans and reality finally sets in. QE, as long as assets are bought/sold at market prices, is mainly just an accounting operation whose main purpose is to make bank balance sheets match solvency and reserve requirements. The government could just as effectively change the banking requirements or even simply exempt banks from meeting the requirements temporarily, but those options are ironically less politically feasible than swapping billions of dollars in assets around.

QE distorts price discovery of assets. Compare the employment rate to the labor participation rate to see the amazing post 2008 jobless recovery era.

Best finance KZfaq channel hands down!

This was really helpful and easy to understand, thank you!! 🥺🙏

In the US, it should be called CE: Continuous Easing.

At 8:55 you brush over the fact that QE continues till markets recover or inflation starts to increase. How exactly can markets recover if the central banks expect everyone to take on debts And at the same time spend more than they were spending before? Not to mention that in times of uncertainty people with money (i.e investors and rich people) tend to save money rather than spend it. I don't know if I have some wrong understanding of the economy but something just doesn't add up here... Also, great video! @The Plain Bagel

Thanks for this video! Very well presented and easy to understand.

You explained this so well, thank you!

Excellent explanation on QE. I noticed someone said "legalized counterfeiting", and I would agree IF the government doesn't unwind their QE programs... which both the US and CAD Feds have not done.

Awesome video mate! You’ve inspired me to do a video on contractionary monetary policy!

Man such a good teacher, have learnt so much!

in this context could you explain the concept of the "liquidity trap", which apparently is the reason why there is no rising inflation in Japan and the Euro zone.

Great illustrations to explain a boring subject to the majority of people.

Richard you explained it very well...Thanks!

Thanks for the upload, this helps!

It doesn't causes inflation if you manipulate inflation number.... "insert roll safe meme"

Great video. Only issue I have is, lowering interest rates and QE are, as you rightly point out, supposed to be for weak economies. So why do we need these policies now when we have a strong economy? If it's a precautionary thing, then why not always have these policies and refer to them as precautionary policies, rather than policies for a weak economy? Second quick point: If you have a reserve currency in a global fiat currency system, as the dollar is, how can it lead to inflation?

Brilliant video - I learned something!

Excellent job on the breakdown. Thanks!

This...7 months old. We have QE round 2 happening now.

Thanks! I finally understand this QE scam better.

Excellent video, thank you. Very clear and concise.

Hey your videos and explanations are amazing. Would you consider covering the CFA level I curriculum? I think you could gain a lot of traction and it doesn't have to formally cover all the content but rather maybe an overview of some of the complex topics, simplified for the average audience

"the printing of more money" in this day and age just adding more digital money further inflating money lol

"Quantitative Easing is not just printing money and dropping it from an helicopter" It´s more complicated. Then: Is printing money and giving it in exchange for pieces of paper that are valued in older printed money. LOL I stopped there. Thanks for the info.

Hi! how are you? I've finally decided to apply for the CFA exam lvl 1, but what do you think about the Bloomberg prep courses? is it worth the expense?

best overview in QE by far.

I just hope we don’t end up like Venezuela were people can buy a tank of gas for 2 bananas 😅

Quantitative Easing = Print more money and put into market circulation.

Great video, do you have one on MMT or can you make one?

Very well explained, thank you.

1:31 That looks kind of like Australia...

But when my uncle tries to print money he gets his ass thrown in prison, how fair is that?

So basically I spend my life working for the same money they print in their back yards. In hopes to enjoy the money by retirement age, if I'm still alive. While they take their cut through taxes and income taxes also getting the immediate purchasing power of the fresh dollars they print, which devalues what I have left after but also before taxes. Sounds fair.

Hey, this is great. My life has become a lot easier and more comfortable since I started eating, wearing, and living in dollars. Thanks for the advice.

I just want everyone to know that QE is in effect today and will be till next year. Look up the "repo market". Its just QE under a new name.

Subsiding bubbles of stocks and assets.

Always great content on your videos Richard..Could you sometime make a video for your European friends of the channel on best brokerages to use for investing on securities around the world?

Helpful video. Thanks for making it.

Here after the Fed announces unlimited QE

Why couldn't you have made this 2 months ago when the fed started not-QE QE? Would've def helped my investment decisions if I truly understood what was happening lol

Hi! I love how simple your infographics are. May I ask where you get the images? Is there a paid platform to do these kinds of videos? Thanks.😊

This video was released exactly 3 days after China reported it's first Covid-19 case. Damn, who could've known, how relevant this video would become in just a few months.

Incredible Video. Thanks!

Love the video, straight forward and I informative. I implemented recent strategies and was able to increase my Robinhood account a total of 33% in one day. I made a video displaying my experience as a complete beginner. Hope you find it insightful🙏

Haha money printer go brrrrrrrrrrrrrrrrrrr

This is a very amazing lesson. Thank you very much.

Awesome explanation, especially as a refresher

So explain to me where the “free market” component lies in this scheme?

*This is not QE! That's what I heard someone say a few months ago.* 🤣

Great explanation... Was waiting for an inclusion of REPO maket which has gone crazy, lately, but overall, very well done. Now how is QE4 "not QE"?

Explained very well , Love from India

If it applies to us, we call it QE. If it applies to our competitors, we call them currency manipulators.

Quantitative easing 🤔 In Serbia, Hungary, Germany... we call it hipper inflation

great video. you used economical terminology yet you managed to keep it simple. nice job🤝🤝

Excellent explanation.... thanks for sharing 😊.

"it's not that simple" then proceeds to show that yes, it is that simple.

Bitcoin fixes this.

Quantitative easing is basically printing money to help the economy. And lower interest rates Quantitative tightening is the opposite: quantitative tightening is raising interest rates to slow the economy and also not printing money. The reason why quantitative tightening would need to be used is to slow inflation because of Quantitative easing

Would you be able to do like an ideal financial planning guide for a universality student? I know that would be difficult as there are a lot of varibles in that instance but i think a generalized form of that would be so cool and definitly helpful as im putting money away and have no clue what i should be doing with it

This algorithm is timely. Trump’s pump and dump scheme was just announced today.

Much appreciated! So my question (for anyone that may know), is why hasn't the US (or other countries) started to reverse this policy? If the Central Banks are independent, this should be a no brainer. Is it that Central Bank leaderships are now becoming intertwined with politicians?

This is an excellent overview. And dear viewer you can see the consequence: rampant inflation.

I don’t know why money isn’t worthless yet

The only thing keeping the United States dollar afloat is the petrodollar.

This was an incredibly good video. This is definitely gonna carry my econ essay on the Fed and it's policies. And no I didn't plagiarize. Much love ♥♥♥♥♥

For the asset buying part, you forget to add that when there’s less buyers, prices will also drop, eventually, even with same amount of savings, you may be able to buy the house.

The next great recession....how about giving every tax paying citizen a million dollars each ....think about how stimulated the economy would be ....

You aren't reminding the viewer that your money printing euphimism QE is theft, devaluing the savings from people that sold their labor.

Amazing video as always!

It’s so helpful to understand. Satiate about QE

Quantitative easing is a scam.

Socialism for the wealthy

Great video! Any idea who does these animations or the program used?

illuminating explanation and on point!