Some notes if anyone needs em! -Federal Reserve is USA’s central bank, Europe has it’s own ECB, and other countries have their own versions, which have 2 main roles: Regulate and oversee nation’s commercial banks by insuring they have enough money in their reserve to avoid bank runs To conduct monetary policy which is increase or decrease the money supply to speed up or slow down the overall economy -Interest rates = the price of borrowing money on top of the “principle” to cover inflation and ensure profit -Low interest rates cause people to borrow more and spend more & vice versa -FED doesn’t have the authority to change interest rates in US, so they change the money supply (increasing money supply increases the amount of loans commercial banks can give out) -Decreased money supply = less money = higher interest rates on loans -Central Bank can run an Expansionary Monetary policy by increasing the money supply -The FED takes blame for the great depression as they let several large banks fail which caused a massive panic, and then ⅓ of all banks collapsed -The economy is strong when there is confidence and liquidity (liquid assets = an asset that can quickly be converted into cash and with minimal impact to the price received → not stocks, bonds, or mortgages) -Fractional reserve banking is when banks hold some of your deposit money but loan out the rest → reserve requirement is how much they are expected to keep → FED can change the reserve requirement (higher req = less money available) -Discount rate = the rate which the FED charges banks (decreasing rate = more loans = more money supply) -Open Market operations = when the FED buys or sells short term government bonds (govt. Bonds = treasury bills or IOUs) → buying bonds from banks increases its liquidity and increases the money supply -In the USA the Federal Open Market Committee determines how many bonds to buy and sell -In 2008 the FED tried Quantitative easing = central banks buy up longer term assets from banks → they bought short term and long term (like mortgage backed securities) using fake money → which causes inflation -Excess Reserves = how much a bank can lend out

It would be interesting to see a revamp of this series in the wake of covid-19

Watched this video as homework once, flew right over my head. Watched it again a few weeks later in my own time and now I'm hooked. Amazing how being interested in something makes you understand it so so much clearer and better.

Your videos are so knowledgable that I m glued to my laptop watching them 1 episode after another....N my roommates just asked what TV series is so interesting that I said no to a cricket game....Gratitude from India.

Dear CrashCourse, You're saving me from my Macroeconomics final tomorrow,. Thank you dearly.

I'm a business major going into my econ final, and I just wanted to say thank you for clearing this up for me. I've watched most of the crash course economics and they have helped me so much!

4:16 Fun detail: "noli oblivisci mirabilis esse" is Latin for "don't forget to be awesome"

You can tell you're a nerd when you binge watch crash course.

Thunderstruck by that belt.

Why do so many people complain about them talking too fast? If it bothers you that much, put the video on 0.75 speed. No one's perfect.

I love these videos. I am currently working on my M.S. in Financial Analysis, and my brain has trouble connecting the equations to their theories. Even simple things I learned for my Bachelor's elude me. Your videos make things straightforward enough for me to understand the theory piece more clearly. I appreciate it.

this is so concisely summarised and clearly explained, literally saved my life ,I can kill the quizzes after watching your videos,secret weapon. Looking forward to more of your videos!

Missed two important things 1: Money is dept (for the most part) 2: Private banks create most of the money

Mr. Clifford's "just kiddings" are the best.

DAMNIT JANET

You guys are awesome. Thank you for taking the time to make these videos!

I am sharing this series with all of my fellow CPA exam candidates. Great stuff! Fun too!

This is addictive. My eyes are heavy , its 1 am but I don't wanna sleep!!!! This is so interesting!

i watched this first, then started reading my study for the unit test on monday and i was laughing to myself for a solid 5 minute span because everything in 3 pages of study guide was in 9 minutes of video. all in all, thank u so much :,)

Love it. Started watching before my university course started, started watching again today because I'm stuck

Failed to mention that this system is run for profit. The shareholders are expected to be given a return year in year out. Also this bank is privately owned.

I... Don't know who it Janet Yellen is, even after watching the episode twice. ._.

Love the passion!! timeless series!!

You guys are doing a really great job; I gotta tell you, I like how you make things so simple :)

Yay, a new CC: Economics!

God bless crash course, just learned more in one video than an 80 minute lecture

Love all your videos! Best way to learn!

8:44 Is the most enlighten thing in this video.

I would donate almost all my savings to crash course, but I cannot. I owe them understanding on soooo many subjects and, through that, passing the class.

"Who knows how to spell Quantitative?" Is that really a challenging word?

I've been looking for such video the whole day.. You guys rock !!

Amazing lesson. I learnt a lot from this.

my "there's a new cc econ video" sense was tingling

In the words of one of the Frankensteins that created the monster, "Gold Is Money, Everything Else Is Credit" JP Morgan 1912, the year before the monster was created.

Great video! Another reason for sky-rocketing excess reserves could be that the Fed started giving interest on excessive reserves (IOER) since the last crisis, thus incentivising banks to keep excess reserves rather than making (riskier) loans to private individuals.

Love the channel thanks for all the knowledge

If Dan Brown watched this, he just got another idea for a novel...

These are pretty complex concepts guys! I spend an entire year of masters at LSE learning this stuff, you can't just rush through speaking fast and expect people to understand. Look at the comments, they didn't learn much.

Thank you Crash Course for helping me study for my teaching certification!!

Haha money printer goes brrrrrr

>"The US and other foriegn governments have worked hard to make sure the Fed is isolated from politics and potentially short-sighted politicians." I long for the simpler times of 2015...

It's Jerome Powell (chairman of the fed) now for anyone who doesn't know. I think Janet Yellen retired

Fantastic Video. Perfect refresher before my exam today!

This helped me with my homework so much. Thank you!

These videos just cover the basics. All the 19 year old armchair economists that think they know everything need to chill out

That illuminati joke had me weak! Thanks Crash Course for making this economic policy course less painful!

Thanks for this Wonderful Course Team!

Excellent, excellent video. Thank you. I was looking for a video which explained how central banks work in the real world.

Have you not brushed over 2 important concepts? 1. Fractional reserve banking allows banks to lend out up to 10 times more than they have in deposits leading to predatory lending, instability and speculation. 2. The idea that central bank policy is not linked to 'politics' actually means that they are not accountable to the people, nor their representatives which may lead to policies which do not benefit society at large. Whilst I understand that the video looks to simplify the issues at hand and portray a mainstream viewpoint, simplifying holds the danger of giving the impression that our economic system is technically optimal in its operation (which it isn't) and morally and politically uncontentious (which it also isn't)

Illuminati confirmed! lol

THANK YOU!!! made it so easy to understand yay!

I hope you could post more videos! I always miss CC Economics.

Great course, thanks a lot for making this available! Just one question: at 5"12 you say "These treasury bills are issued by the Government" but at 5"26 it says, "If the Fed issues more bonds.." - so who is actually issuing these bonds, Gov or Fed ?

it doesn't mention that it's a PRIVATE bank...

Wow! You did a video on monetary policy! I’m stumped!😂❤🎉

thanks Alot this is really helpful ! :)

Dear FED, You're fired. ~Love~ AMERICA

Hey I know Janet Yellen she's the counterfeiter in chief!

0:01 I love that ACDC belt.

Hi @CrashCourse , I notice a typo in the description of this video (the word "aand "). I love the videos that you made guys =D Keep doing that awesome work =)

Macro-economics at some point my eyes glaze over and my brain says "Okay, it's basically Voodoo right?".

Milton Friedman is the man !

This was awesome. thanks

love that acdc belt, and the video of course :-)

5:19 quantitative easing? central bank buying govt bonds and securities

God bless for helping me pass my final econ essay

This so so clear now !!

Always good stuff here

Here come the Austrians.

END THE FED!

This Saved me omg thank you

This video actually makes sense

So, uh... who is this Yellen person, then? I've watched this video twice and I still have no idea. They never actually say how she fits into this whole thing... her name only comes up three times. Is she in charge of the U.S. federal bank?

It is important to remember that the Federal Reserve System is owned by the commercial banks; the Fed is not a government agency. Under the law that created the Federal Reserve System, the Fed became the only entity permitted to self-create credit. When the Fed issues new Federal Reserve Notes and then loans these notes to the U.S. Treasury, what is exchanged are IOUs for IOUs. Now, let's examine the term "fractional reserves." When paper currency was redeemable in gold and/or silver coinage, but the bank issuing paper currency did not hold sufficient coinage to redeem 100% of the notes in circulation, this was when we had a fractional reserve system. Today, there is not requirement that anything tangible back the Federal Reserve Notes issued. There are no REAL money reserves backing this paper currency. Federal Reserve Notes are essentially promises to pay nothing in particular.

Love this stuff.

You guys are awesome!

You just saved me from failing my economics exam ahahahhah XD

I watch the whole episode on 0.5 speed and I omg they have finally started to speak normal'ish' :D She could be a bit faster but finally I got to understand the fast guy. :D

YAY ECONOMICS I FEEL LIKE THEY TAKE 4 EVER TO UPLOAD AN EPISODE

Nice belt, Mr. Clifford!

1). Create a bubble. 2). When economy collapses save the economy by creating a bigger bubble. 3). Profit. Keysian Logic. Because everyone knows that economy is in a great shape right now.

I don't believe there should be any government involvement in the economy, except to prevent basic infringement of people's rights to their own person/property (murder, rape, theft, fraud, etc.). Governement protects against these things through law enforcement, a justice system, and a military. Everything else should be left to the people (or at least the states) to decide for themselves. This included anything to do with banks or money. Currency should be denationalized and subject to free market competition like everything else. People should be free to use whatever currency they deem fit (most stable, portable, divisible, etc.). There should be no central bank that has a monopoly on control of U.S. currency. Of course, private banks (like the federal reserve) can produce their own currency, but the people should be free to opt for another form and government should not be involved. If a bank screws up, they should be allowed to fail like any business to make room for a better one (like ones with more liquid assets). The government shouldn't be speeding up or slowing down the economy.

loved it!!

So informative

The banks don't have any money in them. It's called fractional reserve banking.

The guy in this video talks way too fast!! - I had to rewind it after every clip, just to grasp all of what he's saying.

Super information

best thing i like in this vid is the ACDC belt!!!!!.....btw, nice vid.peace.j.

You make it sound like the Federal Reserve is a government body. It's not.

Fun Fact: Sense the Federal Reserve was created in 1913, the US dollar has lost 96% of its value, which means a dollar today is 4 cents in 1913, this is caused by inflation which happens when there is more money printed, when the amount rises the value falls.

I love the implication that a dentist office is the only place you would find a magazine.

preparing myself for the BDT!! "BIG DAMN TEST"or so what my econ teacher calls our final lol

End the FED.

The solution is resourced backed money created by the people of the nation and a pure free market any one that says the fed works needs to explain why the US is drowning in debt . If the US dollar was removed as the world reserve currency you would see the results of the FED rather quickly .

The Fed can also literally print money as well.

that AC/DC belt though

Video about the biggest thief in the world. #givemegold

I'm homeschooled. This is what I use for Economics Class. Interesting, no?

Absolutely loved this video. I;m from Bolivia :) Do you guys have a line of cash courses just in economics?

Loved the video! But feel you rush through the material. I had to rewind a couple times lol