The amount of topics and subjects that I have learned from this man😊🙏🏽

@bargdaffy1535

Жыл бұрын

He is amazing, so clear and concise on so many topics.

The amount this guy has helped my life is immeasurable.

Wow, you explain complex things in an easy manner. Thank you, much appreciated

I have trying to grasp and understand the M's for a while now ... this is simply put and very well explained ... Thank you very much, your videos are just perfect

thanks for explaining, i was having trouble with this

thank you .. is there a video that covers all mony transaction in one economy ?

Thank you for answering my questions :)

Thank you for providing me the basic concepts of money and financial definitions.

Thank for your sharing .It's informative

Great explanation. I like how the colors separate entities

This video is brilliant, thanks.

Can you do a video on M3 money supply?

amazing video ,thanks a lot

I think the simpler way to say this would be that banks can create credit up to M times their deposits.

Money printer goes BRR

His IQ is more than I can count to.

@victorelnecave5157

3 жыл бұрын

this guy must be a genius.

@mohammedwells1186

2 жыл бұрын

Instablaster...

I am studying to take an economics test to teach the subject in Georgia and this video was very helpful in understanding this concept. thank you very much.

@priyankatheartist8643

4 жыл бұрын

that's cool

@manuelgissing3449

2 жыл бұрын

thats cool good luck!greetings from austria :)

This man is a gift from god

It was a real great help....thank u :-)

at 7:13 when he is masuring checkable deposits dosen't he do doube counthing on one dolar of PB#2 which has been alrady counted as a one dolar in the pocked?

so this is all free? I love this guy

What is the best site to follow up M2 broad money supply?

This dude is a legend. He helped me get through engineering school.

which multiplier creats more M1, M2 or M3? and how? give simple answer plz

thank you Sal, love it

Thx Great.

We use the same explanation for Credit Cards?

You probably know everything!

@henry3397

3 жыл бұрын

Literally was just thinking this lol. Learned math from this guy years ago, and now that I’m into finance turns out he knows about that too.

@LECityLECLEC

3 жыл бұрын

@@henry3397 He studied electrical engineering ans has a harvard MBA. I don’t think Sal knows everything, he just loves learning and he loves teaching. The first person he taught was himself, and that’s why he is so knowledgeable. With such a strong math background, he’s just connecting all the dots. If we ask Sal does he know everything-I think he’d tell us the truth...he’s only scratching the surface of something very big!

Thank you

This completely neglects that central banking employs double-entry accounting for an elastic supply. It looks like I have to go back to central bank papers to learn the real definitions of the monetary supply figures.

Informative video, however the initial debt that was printed would’ve required interest, which also would’ve been created out of thin air, thus increasing the existing debt (currency) in circulation.

Thanks Sir

So, what happens now that the m2 is no longer different to m1, because is so liquid that there’s no sense to differentiate from one-another?

was M3 gold?

Why were the savings accounts counted 2x since 1USD went from bank A to bank B?

3:30 I can't imagine someone borrowing money from one bank to deposit the money in another bank. Sure way to lose money from interest difference

@M.-.D

4 жыл бұрын

encodersofia you essentially do that when you purchase a house with a mortgage. Except it is not your account, simply someone else. He removes the consumer transactions for ease of following. Concept holds though.

@TheOneAboveAllx

3 жыл бұрын

Also I know people doing that to diversify as you can only get 250k FDIC's insurance when a bank goes bankrupt

@kaberle71

2 жыл бұрын

@@TheOneAboveAllx Only 100k per account in Canada!

@nateisawesome766

Жыл бұрын

​@@TheOneAboveAllx as they're doing rn

why does this not have 300,000 views?

Thanks

Safe assets to save your money in is scarce materials like gold, silver, copper etc. Buy those. Anyways, I love khanacademy!

can you be my professor...for all my courses

Khanacademy should start handing out KZread diplomas

Money usually goes from a central bank to the next bank first and THEN to individuals and businesses as needed NOT directly to an individual from a central bank. That example seems a bit incorrect.

What is the benefit to PB#1 of giving the 1$ in savings to another PB(#2)?

Are physical assets money? You can sell them.

y u so smart!

Thanks for video:) I'v watched previous video but I still don't understand. Previous video says there's some money ON DEMAND,thus PB(Private Bank)can't loan out these money. So,how can PB can loan out money from checking account? (the money in this account is on demand. be able to withdraw at anytime) I know Fractional reserve banking,but that is the Money No.1 in the PB#1,am I right?

@krzysszymanski4922

Жыл бұрын

Although the money is on demand, the bank does not keep it all on. The bank basically hopes that there not everyone will want to withdraw all their money at the same time. If too many people want to withdraw their money and the bank has lent too much, it goes bankrupt (this is a bank run).

Enough Thank yous, but what does it mean when banks "write checks"?? Doesn't matter, beautiful drawings though.

awesome

great topic! i looked for this clear explanation for a while now, great job! just a quick question, at the beginning you mentioned the central bank prints money then they go buy bonds then the money will flow into the bank, when you buy bonds that means the money should be used for government projects right? I don't see how these newly fresh printed money will become available for the market, as they were used to buy securities or any other purposes, how does this work exacly? I lost there :) or bonds also can mean just borrowing money to circulate more money in the economy, the when economy expands the government will earn more tax money, and they will pay the coupons from bonds with this extra money, is this roughly how it works? thanks in advance for your answer :)

@jaytweet9494

2 жыл бұрын

The FED is not buying new securities from the government in this example, they would be buying existing government bonds on the open market (or, more likely, directly from banks). Whether they buy the bonds from an individual or the bank doesn't really affect the model because the assumption is that the individual would deposit the proceeds from the sale into a bank, so no matter what the money ends up in bank where it will multiply due to fractional reserve banking.

@teekastian

2 жыл бұрын

@@jaytweet9494 thanks! clear!

@bighands69

Жыл бұрын

Most of the money is not available to the market. Politics and government is very poor at actually managing things. So when you see a headline figure as a sort of dumb rule you could almost divide it by 10 in terms of the true market effect. The real danger of QE is not inflation it is the retardation of long term economic growth.

man, this makes no absolute sense in my head without accidentally double counting

What about the 3 dollars that the system creates out of thin air? I assume that it is for making the money circulate more easily, but the question is: What backs up these 3 extra dollars from M2, as the 4 dollars from the central Bank had securities that backed them up?

@mlovmo

4 жыл бұрын

That's just it: It's created out of thin air. Makes you have solid confidence in the system, doesn't it? Yikes..

Hummmm ..... Nice explanation with good graphic representation

something i can watch the night b4 my exam and end up with a better score, AWWW YEAHHHH~~~

@theepicsealshow123

5 жыл бұрын

Did you get a better score?

@Ratracer_222

5 жыл бұрын

@@theepicsealshow123 no he failed!

I didn't get u

@qaqambandzuzo289

5 жыл бұрын

He's running around the bush

@billytheweasel

3 жыл бұрын

@@qaqambandzuzo289 disagree, he uses generalized terms for clarity, that's about it. ie; the fed doesn't print money, treasury does that vis the US mint

Absolutely nothing, which is one of the main critics to the fractional reserve banking system. As strange as it may sound, the power of increasing and decreasing the money supply in the economy is in the hands of Private Banks

ty

Who owns the security the central bank purchased in step 1?

Around 6:45, should you perhaps say "checkable reserves?" I see a lot more "reserves" than just $2 worth, unless i misunderstand how you are defining "reserves."

@watwutqwerty9150

9 жыл бұрын

by reserves he means the money banks have to keep in their reserves. which is one dollar per bank here.

Pardon me for asking. Why does the Fed need multiple "private bank" accounts? Why not just one? What is the whole purpose?

I had a question, who creates the security in the first place for the central bank to purchase?

@qmance8062

4 ай бұрын

the central bank does, it sells them when it needs money and buys them back when it wants to pump money into the system. I guess, idk.

So what your saying in the video is that QE3 promise of $40 billion a month is more like $70 billion when it gets into our economy using M1 money supply. Very interesting... thanks for helping to figure out screwed our dollar has become from the FEDS. God bless America!!!

@bighands69

Жыл бұрын

No. The number $40 billion is just a headline number and not the real amount of transfer. Most of the US debt is not cash based and is long term debt that is really liabilities. So when they say $40 billion it could be a direct transfer of $2 billion or $20 billion but would never be the full amount. When it comes to interest payments on the QE about that is created they can defer and even roll it back into the original creation amount.

Are you counting debt cards as checks as well?

after i watch this vid, can’t understand

Really digging Ari Shaffir's voice over lol

I'm pretty sure the banks can lend much more than 90% in the Netherlands it's around 96%

If you have a tough time getting rid of $1 billion worth of Pez dispensers you clearly need to start networking and meet the right people

watch

And now the required reserve banks are allowed to have is 0...

Wow.

How can i find out what the money supply was in 1971?

What are securities?

@thomasnega1868

4 жыл бұрын

Stocks and Bond

I don't get it, why central bank buys government bond instead of directly lending money to commercial banks?

What a pyramid scheme

@Volticymo

7 ай бұрын

For real

@jonojam

26 күн бұрын

@@Volticymowhere did you think they got the idea, it’s always been this way…

Does security mean bonds and stocks?

@Zeus-7778

Жыл бұрын

yes

I don't understand why M1 or M2 are ever more than M0 because not more than one person can have any of those $4 originally "printed". It just feels like for M1 and M2 we're just double-counting dollars...can someone help me out here? Is the nature of lending the missing part of the equation, and if so, the banks cannot lend more than the money they have, which still makes me think there's double-counting.

@bighands69

Жыл бұрын

Welcome to the world of government finance. It is a bureaucracy that is slow and not good at getting things done. You will find that the whole system is full of repeats and overlapping just for the sake of it. Now there is value in the different stages of the money cycle and there is lots of baggage as well.

@musak.4068

Жыл бұрын

Because we have a fractional reserve system where "money" is multiplied.

RIP US Economy

3 checks ... 1st check: zero dollars and 50/99 =0.505;. Second Check: zero dollars and 50/100 = 0.50. Third Check: zero dollars and 50/101 = 0.495. The banks have to honor this right?

Let me guess, M3 is Rich People Money, Real Estate and Art and Collectibles.

@musak.4068

Жыл бұрын

No, M3 = M2 + Money Market Funds.

So it seems the security that the central bank bought from the private bank is pretty valuable. How did the private bank come into possession of this security? Who did they buy it from? Or did they (private bank) create this security to begin with? and why couldn't just the private bank use the value of that security to divide it up into checking and savings accounts and lend it out themselves without having to sell it to a central bank? It seems the real creators of money is private bank right?

@svenkateswaran7516

4 жыл бұрын

Racism IS a Disease exactly... the Treasury has to auction off the securities. Fed credits the private banks to buy these securities, only to buy them back as part of QE. But the money supply keeps growing additionally through interbank lending, charging interest on money the banks don’t have. These notes are out of reach from the Fed. As a private bank, you keep writing checks in perpetuity while keeping the minimum fractional reserve mandated, meaning that money creation unlimited more or less; limited only by the number of financial institutions participating in the system.

Can you make a video about M3? It seems like a big part of the money supply: upload.wikimedia.org/wikipedia/commons/thumb/9/95/Components_of_the_United_States_money_supply2.svg/1280px-Components_of_the_United_States_money_supply2.svg.png

@christopheb9221

3 жыл бұрын

the fed stopped recording the m3 in 2006. my guess is they knew about the MBSs/CDOs/CDS subprime scam and prob more that we dont know about(its amazing how many banks do illegal things esp with manipulating markets/prices). they were going to have to inflate the money supply by alot and needed to move things around and not make it public causing panic and realization of inflation and make the dollar worthless. (fractional reserve lending makes no sense you should not be able to lose money when you can create it)with computers the banks must have a much better grip on money supply and the economy in general. But they say otherwise and use the MZM: _On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release. Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks). M3 does not appear to convey any additional information about economic activity that is not already embodied in M2 and has not played a role in the monetary policy process for many years. Consequently, the Board judged that the costs of collecting the underlying data and publishing M3 outweigh the benefits._

@lazarpavlovic1892

2 жыл бұрын

m3 money, other than m2, includes all the deposits and lets say bills from non-banks institutions, simplified: m2 and all other money no matter where the money is... thats why goverment doesnt wanna deal with it, there could be million types of manipulation with that money, maybe example can be money laundering, idk, i am trying to learn too XD

So that means Central Bank buys things with the money that they can print without doing anything. How exactly?

@beesleyrc759

3 жыл бұрын

You live in a corrupt world my friend.

@PerennialWheat

Жыл бұрын

Fiat currency. We used to be on a gold standard where gold can be exchanged for usd which means if the fed wanted to create more money they had to get equal value in gold. Way better system imo. (applies to USA).

Cheques....

@OmarMahmoudov

6 жыл бұрын

lol

@parteibonza

6 жыл бұрын

this is USA. we spell it CHECKS

@davidbowers4707

6 жыл бұрын

lol...

m=f, from fake. “Only Gold is money, everything is else is credit. JP Morgan

M3 RIP, fractional reserve RIP, vault cash RIP., ...USD fiat currency based monetary system? So, QE + fiat currency = sparkle pony unicorns! YAY! NOTE: Real unemployment > go to shadowstats Great vid! buy gold 6-15-2020 yw

This does ot explain the difference between the M0 and the amount of cash usd around the world. the M0 in 2005 was 800 billion but there is 1.35 paper money in total. it does not explain the difference between these two

@aimuser3111

8 жыл бұрын

+ERIKA AHLSTRÖM The paper money in circulation is nominal so it just a raw count. M0 is measured in Real GDP terms so what actual dollar value can buy you when compared to the base year.

@theresahall3029

6 жыл бұрын

ERIKA AHLSTRÖM gjghhgggg

@theresahall3029

6 жыл бұрын

ERIKA AHLSTRÖM jxb how do you make

What is the best english search engine in the world?

@theepicsealshow123

5 жыл бұрын

Stick to Yahoo

what si pez dipensers

@Hellomothersauce

8 жыл бұрын

+Tanshi kohli its just a candy brand

hey you should apply for youtube partnership if you haven't already, that way you get paid a good amount of money by teaching :D

wt are u saying at 0:48? pezzz dispensers? wzatt?

@51MontyPython

10 жыл бұрын

You've never heard of Pez dispensers? Where are you from?

Noice

NO! Then that means advertisements! How could a fellow youtube user wish that?!?! lol

M0 and monetary base are not the same thing. M0 is currency in circulation and is in the real economy. Monetary base includes reserve balances which are not in the real economy. That’s why you can subtract monetary base from m1 and get a negative number which wouldn’t happen if MB = M0. Rookie mistake.

@musak.4068

Жыл бұрын

You are incorrect and a victim of wanting to sound smart rather than being smart. DIRECTLY FROM THE *FEDERAL RESERVE OF RICHMOND: The smallest and most liquid measure, M0, is strictly currency in circulation and money being kept by banks in reserves; hence, M0 is often referred to as the "monetary base."* M0 is referred to as Monetary Base and vice versa.

@DW-xt7vz

Жыл бұрын

@@musak.4068 thanks for the opportunity to clarify on this - I definitely could have laid out my thoughts more carefully. So M0 is useful as a concept because it can be rolled into M1 which can be rolled into M2. If you look at the definition of M1 it doesn’t include central bank reserves. So while as the Richmond Fed notes M0 is “often” referred to as the Monetary Base, this isn’t strictly true and in fact probably shouldn’t be the case if we are thinking of the Monetary Base as the high powered money that creates faster growth in money supply. The reason being that today’s bank reserves pay interest, and thus no longer enters the financial system at the same velocity as it did before this mechanism was put in place over a decade ago. If you look up Khan Academy’s definition of M0 on their site, they actually clarify between M0 and MB as being distinct with M0 being truly liquid cash. Here’s the quote from Khan Academy’s site - just copy and paste into Google to verify: “M0 refers to the most liquid form of money: cash. That includes central bank notes and coins. MB refers to the base money supply from which banks can extend the money supply. In addition to M0, that also includes central bank deposits, which can't be used to pay anyone other than banks.”

@musak.4068

Жыл бұрын

@@DW-xt7vz *So while as the Richmond Fed notes M0 is “often” referred to as the Monetary Base, this isn’t strictly true and in fact probably shouldn’t be the case if we are thinking of the Monetary Base as the high powered money that creates faster growth in money supply.* Stopped right there. It's a quote from the Federal Reserves of Richmond because I was debunking your point. It is NOT solely a quote by the federal reserve of richmond. The Federal Reserves is comprised of SEVERAL reserves throughout the United States btw. Richmond being one of em. You are hearing this from the horses mouth and still attempting to be right.

@DW-xt7vz

Жыл бұрын

@@musak.4068my initial comment pointed out the error in this video which was subsequently fixed by Khan Academy. If you’ve ever seen an H.6 report from the Federal Reserve you’ll know why it’s not good to take the first thing you see on the internet as the truth even when it’s from the Richmond Fed. You are the embodiment of the Dunning Kruger effect. You think that you are coming up with some big secret that the Federal Reserve is made up of several regional reserve banks? Have you ever been on all of their sites as I have and found lots of white papers that are wild guesses? I’d suggest you try to piece things together to find the inconsistencies rather than memorizing facts. My last comment to you.

So M1 is an illusion?

@wananewcom3026

3 жыл бұрын

Haha yes. But scary if u think abt it, most of the money we held are illusions. Iirc 97% of 'money' are in either M1 or 2

You could have explained it much more concisely in a couple of minutes.

Very confusing and bunch a nonsense. On a 1 to 10 reserve ratio banks can lend nine dollars for ever $1 they hold in reserves (deposits). The $reserve depends upon their total depositors. Depositors lend money to banks. Physical cash equates $1 to $1 bank reserves which is withdraw from a local bank. The central bank only ensures that banks cash other banks checks.

@walperstyle

6 жыл бұрын

Welcome to what those crazy Libertarians were trying to warn of. ...but hey, if you are not too late, you can join us on our private islands, there is still time to get into Cryptocurrency and adapt Mises/Hayek into your life.

Does this guy know everything or what?

fast forward to 2022 where no reserve is required anymore. Everything is going to crash, Just a matter of time.

@musak.4068

Жыл бұрын

A reserve hasn't been required for years now.

a bit slow, but very good and informative.

All this is absolute nonsense. very confusing at that.

larry guy....not the point 0.o