Why Financial Globalization is Dangerous

No video

Why Financial Globalization is Dangerous

Рет қаралды 96,771

Күн бұрын

Want to help me do more research? Consider supporting via: / moneymacro or ko-fi.com/mone...
△ Or for one-time donations: www.paypal.com...
5 BOOKS THAT INSPIRED THIS CHANNEL
The Narrow Corridor: States, Societies, and the Fate of Liberty: amzn.to/3gr6pSV
Money Changes Everything: How Finance Made Civilization Possible: amzn.to/3mt3xbY
Adaptive Markets: Financial Evolution at the Speed of Thought: amzn.to/3sCkS3a
House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again: amzn.to/3gqXNeZ
The Third Pillar: How Markets and the State Leave the Community Behind: amzn.to/382Agwo
In these last decades, finance has become truly global. This has a lot of benefits. But, it is also important to understand the four drawbacks of international capital flows.
This video explores the following questions: have countries been right to open the door to international investors? or was it a mistake? And, if it was a mistake, what can they do to limit harmful effects of financial globalization?
This video has been inspired by work from economists at the bank for international settlements such as Claudio Borio as well as the work on the global financial cycle by Helene Rey.
The global financial cycle describes how asset prices worldwide move in tandem along with gross capital flows and monetary policy easing by the U.S. Federal Reserve. Central banks of small other countries will have no other option then to follow the U.S. central bank with their interest rates. This is how the classical trilemma turns into a dilemma.
Want to know more, I'm also using this video in a course that I am teaching at the University of Groningen called International Financial Markets that I teach with prof. Dirk Bezemer.
Also, check out the script for this video here: www.moneymacro...
Narrated and produced by Dr. Joeri Schasfoort (University of Cape Town)
/ joerischasfoort
/ joeri-schasfoort

Пікірлер: 167

@jumarti96 3 жыл бұрын

Just discovered your channel yesterday and I'm amazed by the quality of these videos. The way you synthesize the most revelant elements from the literature (and from the evidence) in such short and accesible videos is admirable. I hope that this channel grows more, it deserves it and it would be a great source for anyone seriously interested in macro/international economics and finance/money.

@1MrName 3 жыл бұрын

Yeah, this video is especially good. Amazed it doesn't have more views

@MoneyMacro 3 жыл бұрын

Thank you both. This video is one I used in one of the courses I teach as well. Perhaps it's a bit too scientific for KZfaq?

@jumarti96 3 жыл бұрын

@@MoneyMacro I think it's more that it's difficult to get enough popularity at the beginning, sometimes one needs a good hit to bring people to watch you, haha. I hope with the fair reception of the recent videos (I have some in the pending list for this week) the channel will start to attract more views.

@MoneyMacro 3 жыл бұрын

@@jumarti96 True true. I'm curious to see how much spillover there will be :)

@FrancisBehnen 3 жыл бұрын

@@MoneyMacro I can assure that every video will have at least one extra view, cause I'm binging them all!

@Isparavanjeloollollololl 3 жыл бұрын

Singapore actually tries to have the best of both worlds, to some degree. There are additional taxes (stamp duties) and limits on foreign ownership of property, and monetary policy is based on exchange rates directly, leaving interest rates floating.

@OopsFailedArt 3 жыл бұрын

Wow. I am so shocked that Singapore makes a difficult and by many opinions impossible task look easy… they’ve never done that before 😹

@joaco4ever11 3 жыл бұрын

singapore is a tax heaven, robbing other countries of their wealth

@OopsFailedArt 3 жыл бұрын

@@joaco4ever11 dude, please do your researching…. Singapore is plenty high. The charge much more than many countries in their region. They don’t have the history of the older nations so they can’t charge as much…. They also run a surplus unlike those “awesome” countries that don’t abuse their citizens with ridiculous taxes…

@joaco4ever11 3 жыл бұрын

@@OopsFailedArt lmao a city state that funnels money from other countries cannot be an example of anything. go smoke a joint so you get fucking canned. that model only works on small nations. like monaco, luxemburg and the like. all tax havens

@OopsFailedArt 3 жыл бұрын

@@joaco4ever11 this statement shows your illiteracy in foreign affairs. I have nothing further to say until you get a few years of life experience and can think for yourself. Have a lovely day :)

@tomamateivictor6313 2 жыл бұрын

I am studying European Politics at the University of Groningen and I have to say that your videos are amazing! It's amazing to see that an actual professor from the university takes his time to popularise his subject properly on KZfaq! Nowadays there are lots of self-proclaimed experts out there who spin all sorts of analyses on the internet. So seeing an actual expert making videos like this is a relief and a pleasure to watch because you know that you are actually learning something valuable from your videos!

@user-wr4yl7tx3w 2 жыл бұрын

The micro problem is that individual bankers like at DB are incentivized to pursue the positive feed back loop since it directly ties to their bonuses.

@MoneyMacro 2 жыл бұрын

Absolutely

@musiqtee 2 жыл бұрын

Sadly (for some), I strongly hold that housing, water, energy and food should NOT be exposed to financialisation. These are basic needs, needed to stay alive anywhere in the world - and in any economy. Pay for such needs, sure. Converting said needs to assets for financial growth or basis for rentierism though, is a sure way to continue hostilities of all kinds. After all, competition is the basis for “free” finance, but competing for basic human needs never gave us anything but violence, social struggles and fairly funky politics. Or simply, war. Finance can create specialisation and needed technology, but financialising human existence means power to so few over so many - way outside of politics too. 👍 (ranting, sorry…)

@niensian 2 жыл бұрын

The way that complex concepts are so well presented is second to none. Best macro channel on you tube.

@DarkHarpuia 2 жыл бұрын

Consider also: being under the whims of foreign capital also means that if your country decides that it should start trading its currency at a lower market value (or market forces make it so), that in turn makes the labor of ALL of its workers also be worth less, which in turn not only strips away their dignity (turning them into cheap labor) but also severely limits their ability to engage in imports and travel. Ultimately I just wish that global south countries engaging with foreign capital did not so easily fall into the trap of "well we need to be attraaaaactive" at the expense of the standing of their citizens in the globe. As a Brazilian, nothing was more demoralizing than knowing that my work at my full time job was significantly worth less than the work of my American friend working part time at Starbucks, and even when adjusting for local prices, I was still earning very little.

@Thanonemo 3 жыл бұрын

Hey, a social studies teacher here. It is nice to watch your videos! So informative and all you said here seems to true where I come from (Denmark). We had a monetary crisis in 2015/2016 I think. Speculators attempted through buying of the Danish currency to force an appreciation of the Danish currency. In response the Danish National Bank printed 172 billion kroner and bought foreign currency with it to stabilize the kroner and keep it relative weak. Perhaps you could explain such phenomenons as well? I was thinking the speculation of the pound in the 90's that forced UK to stop pegging its currency. Again thanks for great content. I really appreciate it.

@nicolasrumboll608 2 жыл бұрын

What is a valuta!!?

@Thanonemo 2 жыл бұрын

@@nicolasrumboll608 So yeah. It's a Danish word for currency... I thought it could be used for English as well. Mb ;D

@nicolasrumboll608 2 жыл бұрын

I love learning new words. Takk

@m1nekji165 2 жыл бұрын

@@Thanonemo russian have valuta (валюта) for foreign currency too!

@sunsettrance7841 2 жыл бұрын

@@m1nekji165 we also use this word with the same meaning in Romanian: valută

@meredfikireyohannes3528 3 жыл бұрын

This is amazing channel. Could you please do a video how IMF and SDR work? And, how it affects the global economy? Thanks

@MoneyMacro 3 жыл бұрын

Related video on a national level: Why Private Bank Money Creation Is Dangerous: kzfaq.info/get/bejne/b5ahjcaUss-7Zac.html If you like this style of research about economics, consider supporting the channel by buying me a 'coffee' via ko-fi.com/moneymacro or gaining acces to an exclusive Discord community via Patreon: www.patreon.com/moneymacro .

@IntrusiveThot420 3 жыл бұрын

Hi! This is a week old comment and I don't know if you'll see this, but specifically with the point about housing prices in international cities: do you think zoning laws play a large role in constricting housing supply, or is it mainly foreign investment?

@MoneyMacro 3 жыл бұрын

@@IntrusiveThot420 my honest answer is that I don't know. I know that vox did a video about its role in us house prices. But in Europe there is not much single family zoning... And house prices are still exploding. I will look into it when I do a housing market video

@IntrusiveThot420 3 жыл бұрын

@@MoneyMacro ooh gotcha! Yeah US zoning laws can charitably be described as "completely asinine." There's a lot of city planning problems unique to the US, because the car was so central to the nation's development, and cities were built around cars, and people are just now discovering how many problems that causes 😂

@tomhayes3291 3 жыл бұрын

Do you think windows guidance or laws to seperate commercial and investment banks could be effective policies in order to prevent national asset bubbles? Combined with captial controls that limit foreign investments to companies that then increase their productivity seems to me to be a useful policy framework to prevent the financialization and commodification that we see in the US?

@yigitcan5479 3 жыл бұрын

Hey, looking forward to seeing a video that covers the Turkish economy in your perspective

@holeefuk8505 3 жыл бұрын

Loving you're videos man watched about half of your videos so far over last couple of days. I'd add too from an investing standpoint that its making it harder to find non correlated assets since everything is becoming so intertwined.

@tomlxyz 3 жыл бұрын

Basically because so many people try to do that so that a correlation starts to form

@travcollier 2 жыл бұрын

I remember back when "free trade = good" was a popular dogma. The Economist of all places had a column about how the logic behind that does not apply to capital transfers and investment. Sadly, it didn't seem to have much effect. I like describing it this way: Modern economies need finance much as a high-performance engine needs oil. But it doesn't run on that engine oil, and you can have too much (especially when you dump oil in the gas tank every time you want to juice up the engine).

@Deorgable 2 жыл бұрын

I really appreciate your style of explaining it. But, if there is one thing I could help you explain things more clearly, try not to draw comparisons. For example when you would want to explain to someone that a car needs gas to operate, you could say that It needs gas just like a human needs food. However you can also say that the engine produces little explosions which require a fuel such as gas to produce those explosions. We'd rather use gas for this because it is easier to transport than for example coal. Do you see my point?

@originalempa7037 2 жыл бұрын

Free trade is good. The pros outweigh the cons

@TheHamoodz 2 жыл бұрын

I've been on a Money and Macro binge lately. Gotta say this is one of the most depressing videos you have. Don't get me wrong, it's very well made and understandable, it's just that the conclusions make me sad. I guess they don't call it the "Dismal Science" for no reason...

@gflei7181 2 жыл бұрын

The length and the quality of the videos is just amazing. Keep it going.

@Keelanhood 3 жыл бұрын

A detailed and accurate explanation, very refreshing! Netherlands > Australia

@boonlee5654 2 жыл бұрын

I like your assessment on financial globalization and the principles behind it. It could not be more true. Keep up the good work.

@user-gl9mf3zo7r 2 жыл бұрын

You truly make the most informative and concise content. I've learned more about capital markets and macroeconomics from you than i did in school. Also your voice is awesome

@MoneyMacro 2 жыл бұрын

Thank you!! Very happy to hear that.

@IkeOkerekeNews 2 жыл бұрын

9:20 What if countries decided to cooperate together to form a "global" central bank? Like the Bank of International Settlements, but stronger and with more powers.

@shawnjavery 2 жыл бұрын

Good in theory, in practice it's just not practical to get an unbiased institution globally. Any multinational institution will naturally favor the larger, stronger, members over the smaller interests. It would be a nightmare to manage

@krazoe6258 3 жыл бұрын

This is a difficult topic, but was well explained, so not too hard in the end. It reminds me a bit about the talking points of Mark Blyth. He lectures at Brown and is awesome at breaking down hard topics like you just did here. Maybe you could get him on your channel? ;)

@MoneyMacro 3 жыл бұрын

Good Idea. I have seen some of his content

@fruitycigar 2 жыл бұрын

Joeri is the economics professor I wish I had back in University.

@harshjain3122 2 жыл бұрын

This is genuinely such an amazing video/ Learnt so much!

@nickthurn6449 2 жыл бұрын

Here's the thing - when you say "investors" that excludes almost all the citizens of any country. There are strong disincentives that prevent everyone who doesn't have access to professional channels. You MAY be able to invest if you have cash but not if you want to borrow and chase a capital gain on appreciating assets. Could you maybe quantify some of the limits people face?

@MoneyMacro 2 жыл бұрын

yes you are totally right that it is quite difficult to invest directly into a foreign (smaller / developing) country... However, many people indirectly invest via e.g. their pension fund... bank ... insurer or via funds / indices.

@nickthurn6449 2 жыл бұрын

@@MoneyMacro ahhh... but few of those indirect investments pass on the returns to their customers!! Aussie Industry Super funds are an exception. Wise are beta testing an account that tracks the MSCI world index. That will be interesting compared to 0.1% or less in Barclays.

@wilsonli5642 3 жыл бұрын

Excellent walkthrough of issues surrounding global finance. However, I am curious about the statement that central banks are "institutions that have been tasked with preventing asset bubbles". Is that actually explicitly the mission of any central banks? My impression is that the mission of most central banks, at least the explicit mission, is to manage the inflation rate (of commodities and consumer goods), fight high unemployment, and manage foreign reserves. Are there any central banks that are explicitly tasked with targeting investment asset prices?

@hemiedwards217 2 жыл бұрын

Only the central bank of New Zealand formally has that remit. Most of the other central bank governors have said explicitly that they can't identify when an asset bubble is occurring let alone manage to stop it.

@wilsonli5642 2 жыл бұрын

@@hemiedwards217 weird how important the Reserve Bank of New Zealand has proven to be in the world of monetary policy...

@cherrybombzoo 2 жыл бұрын

I thought he was saying that preventing asset bubbles was an indirect by product of managing inflation and unemployment. But that's a good question, now that I read your comment I would like to understand that in a deeper way.

@AkashSharma-dj7mx Жыл бұрын

Very relevant now (mid 2022)

@Few_politicians_run_your_life 2 жыл бұрын

Because labor cost are different so, whoever can produce cheapest get richer and the higher minimum wage no job. The rich collect all the profit.

@vytautasvaicys8745 3 жыл бұрын

Your content is second to none. You're a gem of youtube!

@MoneyMacro 3 жыл бұрын

Thank you!!

@luisoncpp 2 жыл бұрын

There are other issues with globalization not discussed here: 1. Makes inequality worse. It's practically an statistical law that most of the wealth always end in very few hands. However those few hands can give jobs and provide extra value for everyone. However, if the money goes out from some countries into others and people cannot move as freely around the globe, that would mean that some countries would not have those extra jobs generated by the extra rich. 2. Encourage poor labor conditions. Companies from a country with good labor conditions could decide to move their factories to countries where the laws allow them to manufacture cheaper, and then sell their products in countries where people has more money. Still, there are not unsolvable problems. Both could be mitigated by regulations.

@mreconomics1125 2 жыл бұрын

"Mostly European banks that financed USA housing bubble that crashed in 07", that is very very interesting, never heard that before! I guess the Europeans may have bought lots of MBS , CDOs on US property, but I wouldn't have thought they bought more than US investors!

@dodododatdatdat 3 жыл бұрын

My friend im a total hobby economist with a social scientist background. Thoroughly disappointed with the available resources on and offline in teaching basic economic stuff. It seems the profession is in muddled waters after the global financial crises. At least idk what to trust when people ta;l about economics and finance. Who profits from telling what story I often find myself thinking. But that could also be attributed to my own misunderstandings about economics or the general 'posttruth' age we live in. Am i correct in the assumption that the academic and commercial economic fields are hard to distinguish? So 1 economist i really admire is Yannis Varoufakis, also because I like his political ideas. Is he economically legit tho? Its so hard to separate economics and politics. And than theirs something called political economics. I have a long way to go, your channel is a godsend. Thank you

@mvs9122 2 жыл бұрын

Very concise and logical. No frills no gimmicks Thank you

@thomas.02 3 жыл бұрын

these videos are fabulous

@jameswelsh3433 3 жыл бұрын

You are the bomb, brother! Fabulous, informative videos!

@red9090 Жыл бұрын

This is super interesting topic. Do you have any recommended readings ? Love your videos, keep up the good work !

@MoneyMacro Жыл бұрын

Absolutely, check out the description, there I link to my blog. This in turn contains literature links in the text.

@joaco4ever11 3 жыл бұрын

housing shouldnt be an investment

@whatsupbudbud 3 жыл бұрын

I somewhat agree, but only to the extent that you should not be able to speculate on the housing market, thereby inflating housing and rental prices. That being said, I don't see why a family should not consider their single home an investment which they can liquidate when they choose so for a fair price, considering initial investment plus all the work and resources put into maintaining it.

@joaco4ever11 3 жыл бұрын

@@whatsupbudbud i mean in a world where people just own their homes, homes would be cheap compared to now, they would be able to sell but houses wouldnt be 500K

@whatsupbudbud 3 жыл бұрын

@@joaco4ever11 yes, I agree that the quote you mentioned is nonsensical.

@Maruwasa 2 жыл бұрын

Pretty humorous that you have a South African account. It is a solid market and space down here.

@MoneyMacro 2 жыл бұрын

Hehe, I just closed it though to fund my move to Belgium. Even though the interest rates were very attractive, I didn't have it for investment purposes. I needed it for my job & life in Cape Town at the time.

@johanlewenhaupt1485 2 жыл бұрын

Can you do a video on gold? CBs record buy, real rates negative for both s&p and bonds

@metaljuan 2 жыл бұрын

Quality content. Excellent pace. Thank you Joeri

@nikpapan Жыл бұрын

When, say, a swedish investor wants to invest in the EU area and trades crowns for euros, could we say that the investor transfered wealth from Sweden to the European area? Because my understanding is that the investors bank would buy Euros with swedish crowns to invest, but where is the transfered wealth reflected? Only on the higher value of the Euro? Those euros existed already. How did that work during the gold standard?

@donsergio2406 Жыл бұрын

Excellent video quality, and depth of knowledge in the subject content. However, I would like to point to a counterexample to your assertion (during the South African stock market example) about the premise that inflow of foreign capital into a country, ends propping up the local currency. Argentina in the mid-90’s underwent a foreign investment process and dollar-pegging of the local currency that lasted almost a decade, to end in a strepitous peso devaluation, and almost 10% drop of her GPD. It seems there is something else required to maintain any currency appreciation in addition to foreign capital inflow.

@joaco4ever11 3 жыл бұрын

housing shouldn't be an investment

@benjaminsteele13 Жыл бұрын

How would something like Keynes' Bancor work in this circumstance? As an American, I am interested in taking us out of leadership so that we don't have to be as locked in to ensuring our decisions don't blow up the planet, but I'm also not certain whether that would be as much of a separation of us from economic power.

@budi_bravo_9 2 жыл бұрын

my favorite channel rn

@gbnoob20 2 жыл бұрын

Very technical, yet so clear!

@MoneyMacro 2 жыл бұрын

Thanks!! :)

@PhilospherKing Жыл бұрын

Free flow of capital which benefits rich people and countries but no free flow of labor which benefits hard working people.

@kamaujohn6303 3 жыл бұрын

You should do a video on South Africa and Africa at large.

@MoneyMacro 3 жыл бұрын

Great suggestion 👍

@huguesjouffrai9618 2 жыл бұрын

Saying that NY or London house markets are bubbles caused by foreign investors is simply ignoring the fact that house prices in these areas simply follow salaries and are actually caused by the huge supply of highly qualified, highly paid jobs.

@petter9078 2 жыл бұрын

Your channel is awesome. Thank you

@MoneyMacro 2 жыл бұрын

Glad you enjoy it!

@eben3357 2 жыл бұрын

0:56 Adam Smith explained investor fickleness using the Invisible Hand metaphor.

@RunicRhino22 2 жыл бұрын

This came up in my recommended, rare algorithm W

@wilhelmvanbabbenburg8443 3 ай бұрын

Is this what's happening in the housing market now? And is it safe to say that only very wealthy individuals benefit from international financial markets or do we all? Why would we allow this?

@adisbern 2 жыл бұрын

The 5 Philippine Peso has been obsolete for decades now.. Wow haven't seen it for so long XD

@001sander2 2 жыл бұрын

great video! Can you recommend further reading on this topic?

@PoiSonSonic 2 жыл бұрын

S-bubble... Acid-bubble... My imagination starts to run wild

@adamzarzycki2625 9 ай бұрын

Can restricting international investors be a part of the solution to the increasing flat pricises in big cities?

@nicolasrumboll608 2 жыл бұрын

Joeri. I have been telling everyone about your channel. You're welcome :) in exchange please cover Argentina in one of your videos. It merits being studied and explained by a clear-talking no-nonsense economist.

@MoneyMacro 2 жыл бұрын

Haha deal

@baltulielkungsgunarsmiezis9714 2 жыл бұрын

According to the laws of my kindred no foreigner may buy our land so we withdrew our support for the repubic the moment it joined the EU.

@Robinpiano 2 жыл бұрын

Asset bubble in the making in the Netherlands, time for ECB to take action and raise interest rates now.

@burkanottere9692 2 жыл бұрын

financing things in a different currency is at risk, too. The centrtal Bank controlls (or trys) the exchange prices. For example when you are in Turkey and you lend USD (for 3 years) you need to pay up XX%. Therofor you have a great risk and your own central bank can controll this risk, too! With increasing/decreasing their currency they can controll you profiting oder losing big time

@valentinviola8814 2 жыл бұрын

Mr Juri, what do you think about Austrian economics? And specially about its contribution in relation to economic cycles and bubbles

@Luca-sz5uy 2 жыл бұрын

It appears to me as if the main vehicle by which bubbles and (private) financial crisis are created is irrational behaviour fueled by missing transparency. If you see prices of a certain asset/stock go up seemingly indefinitely you're expecting it to continue and if the underlying data isn't obvious or available you can't decide rationally anyways. What I would like to know is, what kind of regulation you, Joeri, think is missing in today's finance world? What information isn't available to the public you think should be? What kind of transparency should be demanded from banks/public firms?

@Luca-sz5uy 2 жыл бұрын

Not the same thing, but another question I have and that might be interesting: What kind of financial products have decoupled from the real economy to an extent great enough that they no longer represent a reasonable tool to help the economy increase its output but rather mostly circulate in the world of finance (and possibly create, say, wealth disparity)? It's a common theme to just rant about the incredibly size of the financial sector compared to the real economy but I would really like to see a deep dive on this based on data and actual financial knowledge :D.

@BKFan342 2 жыл бұрын

In a world where multinationals and financial capital can move freely across borders but ordinary people cannot move freely across borders, that world will disproportionately benefit the multinationals and financial capital.

@mahdi5796 Жыл бұрын

Thank you. I didn't get that part, can you please elaborate why small nations are incentivized to follow interest rate of larger economies?

@nimayjain2195 2 жыл бұрын

Can someone please explain the Johannesburg example again if the south african currency rises in value, then wont you get less euros by the time you sell the stocks off ?

@jimmyeigre650 2 жыл бұрын

What kinds of indicators show that international capital is having the effects that you describe? I'm Canadian and with our crazy housing market I'm curious to know how much of a role internationalized finance might be having an effect. There's lots of talk here about "foreign investors" and from the numbers I've seen they don't make up a substantial part of the market. But from your video it seem like foreign capital might be the more influential factor? Is there a way for foreign capital to have the enhancing effect you're describing even if Canadians are the ones buying properties at the end of the day? Great video by the way!

@alphamikeomega5728 2 жыл бұрын

Given that the US is a net importer (last I checked), and given it's a large country, why hasn't the Fed raised rates? Is the effect of European (and other) capital really that strong in comparison to the US economy?

@anhmuhamath 2 жыл бұрын

as central bank's interest is stabilizing the national economy but not the globe, can we say they are co-dependent with the political decision of the nation?

@HeThinksThatIThink 2 жыл бұрын

@Money & Macro is your Netherlands stock Prosus? Long Naspers myself :) Thanks for your work I appreciate it.

@user-wr4yl7tx3w 2 жыл бұрын

Such system problem seems unfixable so such distortion will always happen.

@patrickbateman783 Жыл бұрын

*YES!!!*

@n4870s 3 жыл бұрын

Why did you buy us bonds?

@dumdumbrown4225 2 жыл бұрын

Subscribed - the insights your videos present are worth it. Question: how would I invest in the South African housing market from, say, India? Aren’t there laws that prohibit non-citizens from buying houses?

@MoneyMacro 2 жыл бұрын

Thank you! Happy to have you on board. Typically there are indeed barriers in place for individuals to invest in foreign property directly. One big one is getting the foreign exchange needed to pay someone for their house. So investing in property abroad typically happens via institutions such as funds or indices.

@debarunkarmakar 2 жыл бұрын

Is financial globalisation a function of capital account convertibility of a currency? Say the Rupee was freely convertible, would that cause these bubbles that you spoke of, also can you not use this to fund infrastructure projects, that have a longer gestation period and therefore fewer risks of bubbles and abrupt outflow of money from a said economy?

@Heldarion 2 жыл бұрын

Hey, Money&Macro! (Or should I say Yoeri?) Is there any chance you've heard of the Swiss Franc mortgages that were very popular in central & eastern Europe in 2000s and 2010s? And if you do know about it, what's your opinion on it, given how spectacularly lots of people got screwed by them.

@MoneyMacro 2 жыл бұрын

You can say Joeri. Yes I heard about it. Classic example of the dangers of not borrowing in your own currency. I might cover it when I do a country study on one of these economies

@nutmaster7794 8 ай бұрын

Globalization in general is dangerous

@clemfarley7257 2 жыл бұрын

Nice job.

@drscopeify Жыл бұрын

Your statement about European banks impacted by the US housing bubble makes no sense at all, The largest impacted banks were all American such as Washington Mutual which was the LARGEST mortgage lender that collapsed in 2008 people outside of the USA usually do not know the true structure of American home lenders but Washington Mutual was #4 or maybe #5 and it is the largest that collapsed in US history. The largest home loan lenders in 2008 were the usual suspects all American of course like Wells Fargo and Rocket Mortgage and so on. Today in 2022 the list is pretty similar and there are really no European entities at all involved.

@Ikbeneengeit 3 жыл бұрын

Another great video, thanks. Is allowing international finance having a net positive impact on the lives of residents?

@mvs9122 2 жыл бұрын

My guess it depends. US investment in China has led to net new jobs and therefore economic growth. Foriegn investment in US has led to purchases of pre existing assets (real estate) or securities be it in form of treasuries or stocks. In addition the jobs created by foreign investment (say Toyota or Honda) in US has replaced pre existing jobs with lower paying jobs so foreign investment has caused negative growth in US. Again my guess this explains resistance to trade among low and middle class but promoted by upper classes.

@shushirakawa3182 3 жыл бұрын

Explain to me why raising interest rates is considered a "cure" for housing bubbles? It makes no sense. People are putting too much money into housing? Let's give the bank more of that money. That's sick. You're supposed to tax that extra money, not give it to a random third party. Just roll property taxes into the monthly payment. The fact that non reproducible assets (NRA: money, land, patents, Gold, Bitcoin) go up in value when there is more capital is a property of those assets. It will always happen at any interest rate. 50% interest sucks yet nobody is going to worry about how going from 50% to 10% will "artificially" increase the cost of housing. Meanwhile higher interest makes most reproducible assets (RA) more expensive even though they are not competitive at all. Really, there is an almost endless amount of RAs but only a few NRAs that actually impact daily life. Regulating NRAs with taxation would have a greater positive impact than letting collateral damage hurt the rest of the economy.

@checker297 3 жыл бұрын

people have to pay mortgages, if interest rates go up they suddenly have to pay more to service that loan than they can possibly afford, thus they sell the asset to get rid of the mortgage and the cycle repeats as people are suddenly left with investments which are worth less than they bought it for, yet the mortgage stays the same.

@hemiedwards217 3 жыл бұрын

@@checker297 If the property values go up higher than than what property speculators have to pay in higher interest rates, they'll be prepared to pay the higher interest rates. Higher property values increase the equity of the property owner, without them paying any extra to the bank.

@kennylau9677 2 жыл бұрын

US treasury bonds? That's a bit too safe and has a really low return. Might as well just dump it in the S&P500.

@alfinal5787 2 жыл бұрын

If foreign capital flees maybe the country shouldn’t have messed up their finances or passed crazy laws.

@pebblepod30 2 жыл бұрын

5:35 Which central banks care about asset bubbles? Maybe New Zealand? The RBA in Australia said it doesn't care.

@MoneyMacro 2 жыл бұрын

it is a mixed bag. They still don't care enough. But, financial stability is definitely on the radar of central banks like the Bank of England and many other European CBs.

@pebblepod30 2 жыл бұрын

@@MoneyMacro Thanks for your reply, much appreciated. Here is a question for a possible video?? (1) Biggest political problem Economically is that everyone has different conflicting beliefs about money basic (esp where money comes from). Thus economic issue don't get solved because everyone sticks to money ideologies. (2) Solution to this is a Royal Commission (The is Australian - or whatever the equivalent is in other countries) into basic issues like Govt money creation & private bank money creation. The after that political discussion would not be so out of touch with economic reality; & have a more common basis to discuss & tackle economic & social problems.

@pebblepod30 2 жыл бұрын

@@MoneyMacro What do you think of making such a topic for a video, or with the general idea I proposed? Would getting on your Subscribe Star/Patreon etc make it more likely that this could become topic? Thanks for your awesome videos btw =^))

@MoneyMacro 2 жыл бұрын

@@pebblepod30 hehe. I do share upcoming videos with Patrons and discuss with them about future videos. However, at the moment I have a full pipeline of upcoming videos. I wonder if it would really change politics that much in all honesty. I thought it would when I first learned about this subject. It is a powerful insight for sure. However, I think many of the struggles that shape politics (distribution of wealth) are not that heavily affected by it. Perhaps even to the opposite. Quite a few politicians are aware of it here in the Netherlands after action group activity & parliament enquiries. The dynamics of politics are still largely the same.

@pebblepod30 2 жыл бұрын

I see very little useful or positive in any Country letting Foreign people buy property in their country, unless some special circumstances which mean locals don't want it. And the downside? Oh nothing, just that local families won't be able to afford to own their own home, or rent or else by utterly stretched & exploited financially, since the same home would have to be built anyway. Some countries are run by politicans that aren't this ideologically possessed or corrupt & don't do this. Singapore does housing best imo.

@pebblepod30 2 жыл бұрын

*"unless locals don't want to".