This channel is super awesome for people who haven't had real economy or finance courses before. very clear to look at and think. thumbs up for the contributors!
You're very right. That's what Hong Kong in 1998 and Japan did, raising the interest rates when the speculative attacks launched against them. Of course, raising the interest rate mean less incentives for companies to borrow more from banks, slow down the economic output rate to a certain level, and the bond market may go down. Despite all that sometimes such measure needs to be implemented.
If you recall, the premise is that B is trying to maintain a fixed exchange rate. In the two country example, in order for B to appreciate, A's must be used to purchase B's. If this happens, B's central bank will print more B's to soak up the increase in demand, and thus maintain B's original value.
Because speculators will buy currency A with the borrowed B's, creating increase of the currency B on the market (which will lead to a depreciation). When the currency of B eventually drops in value, they will buy B's back, but for a lower amount of A's, making profit
There is something i don't really understand, when the speculators wants to convert their 1A to 2B, doesn't it create a demand for B and reverse the effect and the money goes back to its old value ?
As far as I think the main reason for A's appreciation and B's depreciation is the increase demand of A country's goods ,assets,stocks and services ,your converting A's currency to B will be like a drop in the ocean, for increasing B's value . So ultimately there will be no effect on demand of B as your contribution is very very small. Thats what is I think might be the answer of your query.
I'm German and currently I am hearing from my fellow Germans a lot of "We shouldn't have joined the Euro talk", despite Germany having profitted immensely. My main argument against that is if we just had the DM, China and the US would basically play Pingpong with our tiny currency... Japan and Switzerland already had to more or less give up influencing their exchange rates....
different countries have different laws, but I believe most advanced countries do have laws that either prevent speculators to buy the local currency more than certain level, or simply ban the speculation.
It depends, if you are in a large class (100+) students you can easily sit in for free but when you get to smaller classes (less than 25) you may be kicked out depending on the professor. Either way, I don't think you're "supposed" to sit in classes for free but I have family that sat through dozens of classes at Berkley that didn't take roll.
They are only vulnerable if they peg their currency. But yes the euro gives them some price stability if they have an economy that fluctuates more rapidly than the broad economy.
I have a few questions: at about 3:18 he said that speculators who are borrowing B's would increase the supply of B's, how does this work? Why does more and more people borrowing B's create an increased supply of B's? What happened in Thailand in 1997? Did they simply ran out of US reserves and thus weren't able to defend their currency, thus causing the Bhat to devalue?
This is one of the benefits of the euro disregarding all the other drawbacks it has. The smaller independent currencies are much more vulnerable to this type of attack. Whether this is worth it or not is another question entirely.
@gkalkowsky, while the end used may potentially have to watch a very small portion of advertising or may opt to donate, Khan Academy is free to the end user! Its an incredibly efficient way to spread information, and the style and distribution method make it available and accessible to a wide audience. I know most Americans don't understand altruism but most of the people involved in KA are volunteers and do it because they want to help other people and spread knowledge, not make personal profit
It is more likely that the borrower, following devaluation, would only convert the needed funds back into B's, while keeping the profit in A's, the currency with the higher and stable value. One of the other videos includes interest rate hikes which are used as a way to stem the tide of borrowing. Currencies are left to float now, so for today's currency troubles, banks are upping interest rates to protect currencies, ie Russia on 12/15/14
You forget the biggest speculator of all, which is the central bank. The other speculators are playing with their own money, and take a real loss if they are wrong. The central bank plays with everyone's money and passes on losses to the taxpayers.
No. Lectures are not open to the public, you have to pay for them. You can 'survey' a lecture for significantly less money than enrolling, and in that case wont take exams or go to lab.
If the currency B is devaluing, interest rates would go up. While some speculators would make a killing, if they enter late and the currency B starts going up, they would get stuck with a big debt of B’s on a high interest rate and a bunch of A’s that are loosing value so i think the risk would be ptretty high
isen't it possible for the central bank to raise interest rates and make it harder for a speculative attack to happen? or would this hinder the internal edonomy to such a degree that the economy would take damage?
School books for free ? Is there any international scholarships for studying there ?? I am interested in masters degree in economics... How is the relationship between universities and international students in general, especially concerning financial support ? : )
This is what exactly is happening between Turkish Lira and US Dollar today. The Turkish central bank is giving life or death struggle to keep Lira under 7 and it looks like it's stucked around 6.999, but many say the central bank had to burn it's dollar reserves unreasonably for doing this and once they start to run out of reserves we might witness a nuclear explosion of Turkish Lira.
Since the interest rates in that country would be very high, to prevent speculative attacks and encourage savings, then the borrowers would risk losing a lot of money if their speculative attacks failed.
Mises explains a force that helps to stabilize prices on volatile commodities that are speculated in a market with equal bull and bear strength. In the example Khan gives, the bull market (the central bank being primary force) is much weaker than the bear market (the economy devaluing currency). In this case, there can be a speculative attack, as Khan explains. Misis isn't wrong, but his idea isn't universal.
Do you pay taxes? If so then it is not free. It costs money to employ a person to teach, it needs to be paid for somehow. TH-cam is not free, it is paid for by advertisement. Advertisement is paid for by consumers. In America we say "There's no such thing as a free lunch".
A trader needs numerous tools to gain success in the field of analysis and speculation with different currency pairs in the Contracts for Differences market. AAFX provides that necessary power to the traders to enable them to see for themselves the current status of the daily forex market so that they gain awareness of the currency pairs that undergo ups and downs due to economic reasons.
He's from the US. Who else would make free educational videos... BTW, I'm argentinian, and I'm currently living in Mexico... so, you can count me as neutral.
Well, here in Mexico I can not enter any university unless I pay (not even the public one since I'm a foreigner). Just wanted to point out that judging a whole country (or any kind of group of people) like that is stupid. That's all...
Don't know all of his specifics, but I know he was involved in hedge funds at some point so hes got money. One of the few liberals who walks the walk in regards to free education, perhaps? Who knows...
You are very biased in you videos... 1. you mention that when b is devalued everything gets more expensive. you dont cover that exporting B's product becomes more competitive??? 2. if you break up the fx rate into possibilities there are not 2 options B devaluing or staying the same. how about B increasing in value if the speculation fails then all the A cur. has to be changed back to B cur. causing B devaluation. please stick to the entire macro book script. 3. got annoyed to finish the video
![[LIVE] : ONE ลุมพินี 87 วันนี้!! คู่เอก "ก้องชัย vs โชคปรีชา"](http://i.ytimg.com/vi/YN6e7HVnekw/mqdefault.jpg)
This channel is super awesome for people who haven't had real economy or finance courses before. very clear to look at and think. thumbs up for the contributors!
You're very right. That's what Hong Kong in 1998 and Japan did, raising the interest rates when the speculative attacks launched against them. Of course, raising the interest rate mean less incentives for companies to borrow more from banks, slow down the economic output rate to a certain level, and the bond market may go down. Despite all that sometimes such measure needs to be implemented.
This is a brilliant explanation of speculative attack. The tone of your voice and nature of your example were very engaging. Thanks a lot for this.
If you recall, the premise is that B is trying to maintain a fixed exchange rate. In the two country example, in order for B to appreciate, A's must be used to purchase B's. If this happens, B's central bank will print more B's to soak up the increase in demand, and thus maintain B's original value.
Because speculators will buy currency A with the borrowed B's, creating increase of the currency B on the market (which will lead to a depreciation). When the currency of B eventually drops in value, they will buy B's back, but for a lower amount of A's, making profit
I have been in Vienna, Austria. needless to say its one of the best cities in the world,.. really great place to live and bring up a family.
This is why the currencies should always be allowed to float.
I think youtube should be greatful for the people like you, thank you so much and i wish u all the best :)
5:51 someone forgot to recharge his batteries
Thank you, i love this channel.
There is something i don't really understand, when the speculators wants to convert their 1A to 2B, doesn't it create a demand for B and reverse the effect and the money goes back to its old value ?
As far as I think the main reason for A's appreciation and B's depreciation is the increase demand of A country's goods ,assets,stocks and services ,your converting A's currency to B will be like a drop in the ocean, for increasing B's value . So ultimately there will be no effect on demand of B as your contribution is very very small. Thats what is I think might be the answer of your query.
Yes, but the country is now fighting momentum/sheep.
"Those weapons of mass destruction gotta be somewhere..." -George H.W. Bush
I'm German and currently I am hearing from my fellow Germans a lot of "We shouldn't have joined the Euro talk", despite Germany having profitted immensely. My main argument against that is if we just had the DM, China and the US would basically play Pingpong with our tiny currency... Japan and Switzerland already had to more or less give up influencing their exchange rates....
Thank you! very good explanation
Great video!
This video is amazing
B= sterling circa 92
different countries have different laws, but I believe most advanced countries do have laws that either prevent speculators to buy the local currency more than certain level, or simply ban the speculation.
It depends, if you are in a large class (100+) students you can easily sit in for free but when you get to smaller classes (less than 25) you may be kicked out depending on the professor. Either way, I don't think you're "supposed" to sit in classes for free but I have family that sat through dozens of classes at Berkley that didn't take roll.
They are only vulnerable if they peg their currency. But yes the euro gives them some price stability if they have an economy that fluctuates more rapidly than the broad economy.
I have a few questions:
at about 3:18 he said that speculators who are borrowing B's would increase the supply of B's, how does this work? Why does more and more people borrowing B's create an increased supply of B's?
What happened in Thailand in 1997? Did they simply ran out of US reserves and thus weren't able to defend their currency, thus causing the Bhat to devalue?
This is one of the benefits of the euro disregarding all the other drawbacks it has. The smaller independent currencies are much more vulnerable to this type of attack. Whether this is worth it or not is another question entirely.
finally it makes sense to me
that's really helpful
@gkalkowsky, while the end used may potentially have to watch a very small portion of advertising or may opt to donate, Khan Academy is free to the end user! Its an incredibly efficient way to spread information, and the style and distribution method make it available and accessible to a wide audience. I know most Americans don't understand altruism but most of the people involved in KA are volunteers and do it because they want to help other people and spread knowledge, not make personal profit
Is this legal? Are there laws against this?
Great explanation, thank you!
It is more likely that the borrower, following devaluation, would only convert the needed funds back into B's, while keeping the profit in A's, the currency with the higher and stable value. One of the other videos includes interest rate hikes which are used as a way to stem the tide of borrowing. Currencies are left to float now, so for today's currency troubles, banks are upping interest rates to protect currencies, ie Russia on 12/15/14
just maintaining big brothers expectations of me..
You forget the biggest speculator of all, which is the central bank. The other speculators are playing with their own money, and take a real loss if they are wrong. The central bank plays with everyone's money and passes on losses to the taxpayers.
No. Lectures are not open to the public, you have to pay for them. You can 'survey' a lecture for significantly less money than enrolling, and in that case wont take exams or go to lab.
If the currency B is devaluing, interest rates would go up. While some speculators would make a killing, if they enter late and the currency B starts going up, they would get stuck with a big debt of B’s on a high interest rate and a bunch of A’s that are loosing value so i think the risk would be ptretty high
Very clear explanation! Thank you!
isen't it possible for the central bank to raise interest rates and make it harder for a speculative attack to happen? or would this hinder the internal edonomy to such a degree that the economy would take damage?
School books for free ? Is there any international scholarships for studying there ?? I am interested in masters degree in economics... How is the relationship between universities and international students in general, especially concerning financial support ? : )
The bank, the A's under it, and the three arrows directly beneath them form a face.
This is what exactly is happening between Turkish Lira and US Dollar today. The Turkish central bank is giving life or death struggle to keep Lira under 7 and it looks like it's stucked around 6.999, but many say the central bank had to burn it's dollar reserves unreasonably for doing this and once they start to run out of reserves we might witness a nuclear explosion of Turkish Lira.
Turns out very true
Since the interest rates in that country would be very high, to prevent speculative attacks and encourage savings, then the borrowers would risk losing a lot of money if their speculative attacks failed.
2:42 Is it possible to stop speculators getting Currency B to avoid the attack?
Wow!
Thnx for the info.. : )
Mises explains a force that helps to stabilize prices on volatile commodities that are speculated in a market with equal bull and bear strength. In the example Khan gives, the bull market (the central bank being primary force) is much weaker than the bear market (the economy devaluing currency). In this case, there can be a speculative attack, as Khan explains.
Misis isn't wrong, but his idea isn't universal.
Depends on where in the world you live mate. Though I guess this answer fits just as well on the comment you answered;)
Whith which currency or tool does country a buy it's own currency?
USD
Currently Turkish Lira under attack.
How much money needs to speculate chinese yuan
Do you pay taxes? If so then it is not free. It costs money to employ a person to teach, it needs to be paid for somehow. TH-cam is not free, it is paid for by advertisement. Advertisement is paid for by consumers. In America we say "There's no such thing as a free lunch".
A trader needs numerous tools to gain success in the field of analysis and speculation with different currency pairs in the Contracts for Differences market. AAFX provides that necessary power to the traders to enable them to see for themselves the current status of the daily forex market so that they gain awareness of the currency pairs that undergo ups and downs due to economic reasons.
Narrator from Hitchhiker's Guide To The Galaxy say that's a lot of B's floating around ;)
your too smart... that could get you into trouble one day.
that's why I've been trading forex fires 5 years, best opportunity in my lifetime
nowadays in Turkey
How do someone in country A borrow money in country B's currency?
By laying down collateral. Not any regular Joe can do it, has to be a powerful institute like a Fund or Foundation.
He's from the US. Who else would make free educational videos...
BTW, I'm argentinian, and I'm currently living in Mexico... so, you can count me as neutral.
Well, here in Mexico I can not enter any university unless I pay (not even the public one since I'm a foreigner). Just wanted to point out that judging a whole country (or any kind of group of people) like that is stupid. That's all...
Ummm.... Seems a little familiar to something going on right now...
Plz, will u provide in normal eng, it can be helpful...
Does anybody knows the name of the speaker?
He's Sal Khan, the founder of Khan Academy
Approves
This is how Soros got super rich.
Bitcoin and Cryptocurrency is very good at this type of attack as seen with Venezuela and now Iran.
depreciate not devalue!
Sal is a pal.
Don't know all of his specifics, but I know he was involved in hedge funds at some point so hes got money. One of the few liberals who walks the walk in regards to free education, perhaps? Who knows...
A++
C++
where tha fk does khan learn all this shit?!
You are very biased in you videos...
1. you mention that when b is devalued everything gets more expensive. you dont cover that exporting B's product becomes more competitive???
2. if you break up the fx rate into possibilities there are not 2 options B devaluing or staying the same. how about B increasing in value if the speculation fails then all the A cur. has to be changed back to B cur. causing B devaluation. please stick to the entire macro book script.
3. got annoyed to finish the video