4 ms·

If anyone is interested in hearing some incredibly knowledgeable and relatively apolitical people discuss this topic check out: https://www.youtube.com/watch?v

by anm89 6y ago

If anyone is interested in hearing some incredibly knowledgeable and relatively apolitical people discuss this topic check out: https://www.youtube.com/watch?v=B4xcCO9v-Os&t=13s https://www.youtube.com/watch?v=B4xcCO9v-Os&t=13s Jeff Snider is the most knowledgeable person I have ever heard speak on international monetary issues.

alexjray 6y ago
This was very informative
bryan0 6y ago
Thanks for posting this. After watching I searched for some diagrams on this process and came cross another one of George Gammon's videos (https://www.youtube.com/watch?v=oLhO7tIAtoY https://www.youtube.com/watch?v=oLhO7tIAtoY). He comes off super sketchy trying to me, almost like a get rich quick salesman, but the actual information in the video seemed legit. Anyway, based on the discussions and videos, it seems like QE by itself is relatively neutral with regards to inflation. what's really important is whether the process leads to more lending, but that is largely controlled by other factors. It definitely didn't seem like QE was actually printing money though, because the govt still has to pay back the initial bond. At least that was my novice interpretation.
- anm89 6y ago
  Yeah it took me a while to come around to Gammon, he uses a really clickbaity/scammy visual language and marketing copy to get subscribers but if you make it past that to the content, the content is mostly very high quality. The specific video you posted is one of his best. And right, the classic equation from macro 101 that sums this up is: P = ( M x V ) / Y Where price level = money supply x velocity of money / gdp Velocity is the amount of times a given dollar changes hands on average. So they are saying that if QE fed reserves never make it out into the real economy via lending or monetized fiscal policy, velocity essentially equals 0 and never affects the price level. Also on a side not, the other guy George mentions in that video Steve Van Metre is also excellent.
  - anm89 6y ago
    correction, velocity would equal 1 here.
ljosifov 6y ago
Yes, that was good. I like this one too - more general, but I think explains visually well where the reserve accounts (with the Fed or other Central Banks) sit relative to the other components of the system. "The Landscape of Money (Part 1): State money, bank money & plug-in institutions" https://www.youtube.com/watch?v=mmWOO7r_NMw&t=6m30s https://www.youtube.com/watch?v=mmWOO7r_NMw&t=6m30s Written texts - "Understanding the Modern Monetary System" https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 from pragcap.com I found to be a good explainer.

by anm89 6y ago

alexjray 6y ago

This was very informative

bryan0 6y ago

Thanks for posting this. After watching I searched for some diagrams on this process and came cross another one of George Gammon's videos (https://www.youtube.com/watch?v=oLhO7tIAtoY https://www.youtube.com/watch?v=oLhO7tIAtoY). He comes off super sketchy trying to me, almost like a get rich quick salesman, but the actual information in the video seemed legit. Anyway, based on the discussions and videos, it seems like QE by itself is relatively neutral with regards to inflation. what's really important is whether the process leads to more lending, but that is largely controlled by other factors. It definitely didn't seem like QE was actually printing money though, because the govt still has to pay back the initial bond. At least that was my novice interpretation.

anm89 6y ago
Yeah it took me a while to come around to Gammon, he uses a really clickbaity/scammy visual language and marketing copy to get subscribers but if you make it past that to the content, the content is mostly very high quality. The specific video you posted is one of his best. And right, the classic equation from macro 101 that sums this up is: P = ( M x V ) / Y Where price level = money supply x velocity of money / gdp Velocity is the amount of times a given dollar changes hands on average. So they are saying that if QE fed reserves never make it out into the real economy via lending or monetized fiscal policy, velocity essentially equals 0 and never affects the price level. Also on a side not, the other guy George mentions in that video Steve Van Metre is also excellent.
- anm89 6y ago
  correction, velocity would equal 1 here.

ljosifov 6y ago

Yes, that was good. I like this one too - more general, but I think explains visually well where the reserve accounts (with the Fed or other Central Banks) sit relative to the other components of the system. "The Landscape of Money (Part 1): State money, bank money & plug-in institutions" https://www.youtube.com/watch?v=mmWOO7r_NMw&t=6m30s https://www.youtube.com/watch?v=mmWOO7r_NMw&t=6m30s Written texts - "Understanding the Modern Monetary System" https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 from pragcap.com I found to be a good explainer.