America is currently plagued by the hydra-headed evil duo of inflation and recession. The worst part about this recession is that consumers are racking up credit card debt. In April alone, credit card debt went up 20% while rates have doubled in a year. Inflation is so high that consumers are literally taking debt for basic life necessities. Collapse has indeed begun..
Every day we have a new problem. It's the new normal. At first we thought it was a crisis, now we know it's a new normal and we have to adapt. this year will be a year of severe economic pain all over the nation.. what steps can we take to generate more income during quantitative adjustment?I can't afford my hard-earned 180k savings to turn to dust
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
In many ways, central banks did win the battle by avoiding the stagflation disaster of the 1970s, but in doing so, they might have lost the bigger war of maintaining long-term price stability amidst structural supply shocks. One of the big challenges is that central banks are increasingly facing political pressure to keep interest rates low, even when inflation is high. The independence of central banks is crucial, but if politicians don´t understand their role, it becomes harder for them to take necessary but unpopular actions.
Even so, the role of central banks, even in literature, is not without controversy. If we perceive economics to be nothing more than a massive psychological play, central banks will always have to deal with an anticipating market, all the while increasing the odds of making a bad call. I am not naive: I know people want CB's to ensure price stability, yet are they truly up to the task?
I disagree. I think independence of central banks is long past its sell by date. Central banks and their decisions have more impact on peoples lives than elected politicians and their decisions impact everyone (e.g. my mortgage doubling in cost has much more of an impact on my life than politicians arguing over taxes or immigration). Yet they are totally unaccountable to the people who have to live with their decisions. I also think their obsession with inflation is completely counter to what most people want (e.g. your mortgage or rent going up is going to hurt you far more than the price of your food going up in price). Time to take back control of monetary policy and bring it back under our elected leaders.
per the video, the fed "fixed" short term inflation by manipulating interest rates; longer term, they have yet to modernize monetary policy with regards to new systemic issues in the economy
@@DavidSadakane their current monetary policy, or rather continuing policy, in regards to taxation to increase actual liquidated cash flow always goes unmentioned. there is plenty of money in the system. it's just the few heads who hold it aren't f*cking using it.
Are you insane? He did a horrific job. Look at how home prices and basic necessities like groceries have increased over the years. The cost of living has been destroyed for generations. This has to be a bot account.
@@scottandrews947 no need to get emotional, we can have a normal conversation if you want. The thing (inflation) you are referring to is just one part of the entire puzzle that dictates FED policy. Of corse the actions by the FED during/after covid, mainly QE made inflation rise quickly. This is true. However I personally think this was inevitable or at least the best option to keep as much businesses afloat as possible. The following geopolitical events have put unforeseen extra stress on the economy, that I think he has handled very well and cautiously, so far. Of corse there is still risk of lowering rates to quickly, or starting QE to early again, but so far this is an incredible puzzle that almost none of his predecessors managed to solve. And he is doing a great job not throwing us in a recessionary OR deflationary enviroment, yet.
Inflation response should be targeted at the fiscal level, hiking interest rates is too broad and counterproductive to effectively fight inflation. Central banks can't do anything about rents, supply shocks, monopolies or price gouging yet they actually end up contributing to inflation through more expensive loans and more deficit spending
@@glostergloster6945 if rents rise when interest rates rise that makes interest rate hikes an even dumber way to lower inflation. And no, interest rates wouldn't alleviate supply shocks, monopolies or price gouging
@@glostergloster6945 I think that was his point, the leverage of interest rate might work in some instances during inflationary periods, however, it may not affect some economic sectors to the same degree.
America should do what India did. Keep an inflation "target". Of around 4%. With a wiggle room of around 2 % on either side. Meaning, keeping inflation anywhere between 2 to 6% at all times. This will make companies more profitable, businesses will stay open, jobs will be available, and even though consumers will have to pay more for products, it will stimulate the economy in a way. Its a 3-4 year process, and takes time. The biggest problem in the US is debt. And this is a way for people to stop overspending on their credit cards. Economic stability begins with the citizens first.
Greedflation, and shrunkflation have been the theme for the past 4 years. Central banks in raising interest rates cannot affect this effectively. Yeah, people might be working, but if there pay isn't keeping up with inflation, isn't keeping up with the rent/mortgage/utilities/the basics, then the social classes affected the most are feeling like they are in an economic recession.
Feels like some are using an outdated playbook to address the current landscape. We understand enough to avoid certain catastrophes, but too little to establish a definitive guide on how to plot a reliable course forward.
So what has happened to weaken central banks' ability to control inflation? Deglobalization? Okay, maybe. You do make a plausible case there, but what else? Climate change? How does that work to reduce their influence? You do NOT explain this or provide any plausible mechanism. Yes a carbon tax might drive up energy costs and therefore also drive up inflation, but why would central banks not be able to respond with higher interest rates? This is not a well thought out video. You do not make a cogent case for the video's title.
America spent 1$ trillion on interest alone in 2024. F-35 ll program, the most advanced military program in history, costed 2$ trillion in 20 years, Afghanistan costed us 2$ trillion in 20 years. Now we spend 2$ trillion only in 2 years, for what? Not for another F-35 lll, but just for interest payments
Afghanistan was not 2 trillion it was around 300 billion but anyway, the US Interest paid on the debt is an important global tool, for exmaple during COVID people form all around the world demanded to buy US Treasuries as a safe haven. The USA cannot say no, go away. So it had to issue debt to maintain the power of the US Dollar and in return got to spend lots and lots of money and give out stimmy checks but it does now cost interest. It is just the way it is. But now rates are coming down so it should get cheaper for the US debt in the coming years.
Its beautiful to see a country with that huge deficit speakeng about controling inflation with monetary policies. It's just plain and simple impossible. If you put interests too low, it will maintein government afloat for a while and will erode society. If you do the opposite, it will maintain money worthing something, but will erode completly the government. Without reducing the deficit, the course for America is to become like LATAM.
"Central banks might be the captain of the team but, they won't be the only player." Interesting take...some play checkers while others play 4D chess. 7:21 "All priced at". There's a Supermarket chain that recently announced that they would be experimenting with this type of technology in some of their store.
What he meant is that the central banks control demand side, when they raise rates it makes people take out fewer loans to buy cars, houses. That is DEMADN side. But if future trouble is in SUPPLY side, which is the factory side making cars, and construction of new homes, that is the supply side which can only be changed by Government laws, making house building easier, faster, less regulations, so you need Government policy to fix the supply side.
nonsense....... it is not 2%, it is 25% +2%, all the money printed has NOT been removed from the supply, basically the middle class has been destroyed and we are all atleast 25% poorer.
Dilemma that plagues central banks around the globe:- Prioritise growth or save people's savings and hard earned money. Make an economically rationale decision or politically correct choice. Market forces, political disruptions and geopolitical factors make it more complicated while heightening the stakes for all stakeholders.
I do not know why the fed did not anticipate inflation. In 2020 by June, supply had toned down as they adjusted to a lock down level of activity, then they started giving away stimulus checks and by Ber months you saw the inflation caused by excess liquidity flow through speculative assets such as bitcoin and NFTs. All of that was in 2020. We did not need to wait till 2022 to put measures to contain inflation but I cannot blamw the fed because their monetary policy decisions are always based on historical data just because that is the safest decision you can make and show to the public that there is reasonable basis thus they are in a reactive position and when they make decisions its impact has a lag time of 1-2 years and not necessarily immediate. It's immediate in publiccly traded asset prices but not to the real economy. I hope the fed would take a more future oriented approach in monetary decisions. They should rely on templates that we have learned in the past 300 years and recognize the stage of economic cycle we are so that they will b proactive
Right? The people with the top comments here are lauding the Fed for handling inflation so well. They did a truly terrible job. The housing market is destroyed for generations. Young people today will never be able to afford homes.
the economy is doing incredible given the insane shocks to it so idk how you can argue the fed didn't do their job effectively... the issues we're seeing now is that rich corporations can't borrow money as cheap so they're choosing to directly raise prices on consumers rather than taking advantage of them indirectly through capital leverage.
The economy is not doing well. Inflation has been insane and most Americans are living paycheck to paycheck. Young people will likely never be able to afford houses. I swear there are insane levels of bots in this comment section.
@@scottandrews947 most Americans have been living paycheck to paycheck for decades. Has very little to do with inflation. Young people could afford to buy property if the people with all the money stopped being allowed to buy up all of the property and outbid them! Do you realize how insane it is that half of the US population rents? If you can afford to rent a place, then you can afford to own it, it's simple math. I could also go on about how we spend 20% of our GDP on cars rather than just living close to work and necessities through denser development. It's not economical to live in massive separated homes dozens of miles from anywhere you'd ever want to go. P.S. I am not a bot, but I'm interested as to why you think so...
@@Dullydude It's obvious that the Fed did a terrible to anybody that has an even basic understanding of economics. Yet, here you and so many others are shouting their praises. It's questionable at best. The fact that they kept interest rates at 0 when our idiotic government printed 1/3 of the currency in circulation is a demonstration of extreme incompetence. Seemingly everybody knew what would happen except them. And now that they have inflation under control (if you believe the numbers), they're immediately decreasing interest rates, which will probably ignite inflation again. Very bad policy. Powell is the most incompetent Fed chair that we've ever had. Worse than Greenspan. Worse than Bernanke. He has caused the Fed to lose all credibility.
@@Dullydude Inflation is simple supply and demand. When the amount of money in circulation increases relative to the GDP of the country, the value of currency goes down. During covid, the governments around the world shut everything down, so nobody was working, so GDP went down. That would be bad enough on it's own, but then they printed loads of money in the form of government lending and private loans. When a nak gives out a mortgage or a loan, that isn't money from somebody's savings account that they are lending out, they make it out of thin air. This is what we mean by printing money, and it happens for personal borrowing, corporate borrowing, and government borrowing. But government borrows far more than anyone else. Imagine that the whole economy/GDP is a bakery that normally makes 100 loafs of bread, and there is a total of $100 in circulation. Each loaf will cost $1. Now imagine the GDP goes down - the bakery only makes 50 loafs, but there is still $100 in circulation. People still want to buy the bread, but there is less to go around, so people will pay more to make sure they get a loaf. Each loaf now cost $2. Imagine the government see's that people are having a hard time affording the bread because it now cost twice as much as it did, so they print another $100 and hand it out. Surely now everyone can afford the bread because they have more money? Wrong, the same amount of bread exists, and people now have more money, but that money is worth less. The bread now costs $4 During lockdown only big businesses were able to stay open, and small ones went bankrupt. Now all the extra money that was printed goes to the big business owners, who buy income gereating assets such as property, making it even more unaffordable for everyone else. This was entirely predictable. Stimulus cheques and low interest rates helped a little bit in the very short term, but did enormous damage long term.
Maybe they should focus more on how the employment data is revised down month after month yet they use the initial readings to decide policy, maybe also stop pooling employed people into one group, someone who works one hour per week in America is considered employed, they are not adding much to the economy though, the Fed and BLS buff the numbers to suite their own agenda, if they took the real employment data they would have cut already, problem is they don’t want people to know the real numbers.
Appreciate the detailed breakdown! Could you help me with something unrelated: My OKX wallet holds some USDT, and I have the seed phrase. (alarm fetch churn bridge exercise tape speak race clerk couch crater letter). How can I transfer them to Binance?
@@drscopeify They said Trump policies would damage things. That is clearly biased because half the population does not think that (they think it would improve)
@@andreasdelawareRegardless of what people think about trump... His policies would increase the inflation... Just because he frame them as "pro american" doesn't mean they are sound. Just ask any economist instead of media/politicians. Also you got to snap out of the illusion that US president runs the world.
Yeah but look at Trump and Biden and Kamala they are all trying to offer lower taxes instead of balanced taxes. It's just not popular and wont win elections saying we need to balance the tax system. Big issue
Although Inflation problem was set off in 2020 during Covid, but from 2022 during war it shifted from monetary to political inflation, so political tools have to be used to handle this inflation not monetary ones.
No. The opposite. They just need to stop postponing the inevitable. If they continue like this, inflation will for sure set in. If not already doing so.
America should do what India did. Keep an inflation "target". Of around 4%. With a wiggle room of around 2 % on either side. Meaning, keeping inflation anywhere between 2 to 6% at all times. This will make companies more profitable, businesses will stay open, jobs will be available, and even though consumers will have to pay more for products, it will stimulate the economy in a way. Its a 3-4 year process, and takes time. The biggest problem in the US is debt. And this is a way for people to stop overspending on their credit cards. Economic stability begins with the citizens first.
CBs job is like a fortune-teller. They know the past. They barely know what happened 3 months ago (where they keep revising the figure in the months ahead). They don't know what is happening know, often assume or guess. They try to predict the next 6 months. They have a slim idea of where the economy may be in 12 months. They have one big control knob to react, which is monetary policy, which in a sense regulates demand. The other big control knob is on government, with fiscal policy. Just like with Tango, it takes two to dance and this is the problem. With advanced economies with record high tax revenues, high public debts and low productivity (Europe) and middle class income families struggling to pay their bills, adding more taxes and or protectionism on the supply side will potentially, most likely increase inflation. This also leads to more populist candidates as we are seeing everywhere. Where is the next China? Vietnam? Bangladesh? India? Indonesia? Yo-Yo inflation is here to stay. The question is, what will happen with the job market? Just keep stagflation at bay, otherwise we will have a Lost Decade in Europe.
Deflation is seen as bad... prices demand and wages drop below the target. Dis-inflation is meant as a way of saying "slowing inflation and stabilizing it at a manageable target of 2%/year". We want growth but not as hot as we were running.
Because, and stick with me here: they are different things. Deflation means a lowering of price level (or "negative" inflation percentage wise across the board). Reduction of inflation means a reduction in the increase of prices. So if inflation goes from 5 to 2% it is disinflation, only if it goes to -5%, meaning things start getting cheaper across the market (bad thing for the economy and a lot rarer) that the word deflation is right. There is no current deflation and pray for there to not be one because you will notice the difference of what they mean then.
Deflation is bad for those who have lots of borrowing, like the government and big business. Deflation is not a problem as long as it is a only small amount, just as with inflation. Economist will tell you that unless we have inflation, nobody will spend any money and the economy/GDP will collapse into recession, which is of course nonsense.
Chinese workers always worked for Chinese companies. American companies don't own and operate factories in China, and never did. They just order from local factories and sell the stuff in the US or elsewhere. Not even Apple owns any factories in China.
In the United States, some combination of Congress and the executive branch. They're basically alluding to (currently not fully realized) automatic fiscal response tools like sending out checks in a downturn, as happened during Covid, or similar options to restrict demand when inflation is high
Inflation is better than deflation. What would have happened if the governments had not stimulated the economy during COVID lockdowns, job losses, and supply chain disruptions?
Inflation is not better than deflation. This is a myth that is perpetuated by corrupt politicians and incompetent economists. Inflation only benefits asset owners. Young people would benefit significantly from deflation.
It was a self made problem. Lockdowns did very little to stop covid, but did huge harm to the economy, and then they made it even worse by printing loads of money. Worse for us that it - the rich and powerful benefited immensely.
Isn't it unfair to say the CBs won the battle but lost the war against inflation when already in the video the narrators tell it's beyond CBs power? It is like saying Michael Jordan won an NBA championship but lost an NFL one. How could he win that? A more fair thing to say is that, there are other factors at play that effect inflation. Rates alone may not be the best tool to control that. The crucial thing is that we're talking about FED rates. So it still has an enormous power. So down playing it is very premature too. Oh how easy to spew BS like this. I should've been chief economist in Bloomberg or something. Nobody really asks for proper proof or data to back your claims anyway.
America is currently plagued by the hydra-headed evil duo of inflation and recession. The worst part about this recession is that consumers are racking up credit card debt. In April alone, credit card debt went up 20% while rates have doubled in a year. Inflation is so high that consumers are literally taking debt for basic life necessities. Collapse has indeed begun..
Every day we have a new problem. It's the new normal. At first we thought it was a crisis, now we know it's a new normal and we have to adapt. this year will be a year of severe economic pain all over the nation.. what steps can we take to generate more income during quantitative adjustment?I can't afford my hard-earned 180k savings to turn to dust
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
Geniuses ? Naaah I can assure you I did not think that 😂
In many ways, central banks did win the battle by avoiding the stagflation disaster of the 1970s, but in doing so, they might have lost the bigger war of maintaining long-term price stability amidst structural supply shocks. One of the big challenges is that central banks are increasingly facing political pressure to keep interest rates low, even when inflation is high. The independence of central banks is crucial, but if politicians don´t understand their role, it becomes harder for them to take necessary but unpopular actions.
Even so, the role of central banks, even in literature, is not without controversy. If we perceive economics to be nothing more than a massive psychological play, central banks will always have to deal with an anticipating market, all the while increasing the odds of making a bad call.
I am not naive: I know people want CB's to ensure price stability, yet are they truly up to the task?
Ok boomer
I disagree. I think independence of central banks is long past its sell by date. Central banks and their decisions have more impact on peoples lives than elected politicians and their decisions impact everyone (e.g. my mortgage doubling in cost has much more of an impact on my life than politicians arguing over taxes or immigration). Yet they are totally unaccountable to the people who have to live with their decisions. I also think their obsession with inflation is completely counter to what most people want (e.g. your mortgage or rent going up is going to hurt you far more than the price of your food going up in price). Time to take back control of monetary policy and bring it back under our elected leaders.
To me is the other way around is the bank that were keeping interest low and government must accept it.
I must’ve missed it… you were going to tell me what the fed got wrong about inflation
per the video, the fed "fixed" short term inflation by manipulating interest rates; longer term, they have yet to modernize monetary policy with regards to new systemic issues in the economy
Everything.
Wow. So educational. So insightful 🤣
@@DavidSadakane their current monetary policy, or rather continuing policy, in regards to taxation to increase actual liquidated cash flow always goes unmentioned. there is plenty of money in the system. it's just the few heads who hold it aren't f*cking using it.
Powel really did and is still doing a great job amidst all the geopolitical drama and complicated economical situations.
Yes, your masters are wonderful!
@@homewall744 what do you mean?
@@homewall744ah so you want the FED to suddenly drop the interest rate? 🤡
Are you insane? He did a horrific job. Look at how home prices and basic necessities like groceries have increased over the years. The cost of living has been destroyed for generations. This has to be a bot account.
@@scottandrews947 no need to get emotional, we can have a normal conversation if you want.
The thing (inflation) you are referring to is just one part of the entire puzzle that dictates FED policy. Of corse the actions by the FED during/after covid, mainly QE made inflation rise quickly. This is true.
However I personally think this was inevitable or at least the best option to keep as much businesses afloat as possible. The following geopolitical events have put unforeseen extra stress on the economy, that I think he has handled very well and cautiously, so far. Of corse there is still risk of lowering rates to quickly, or starting QE to early again, but so far this is an incredible puzzle that almost none of his predecessors managed to solve. And he is doing a great job not throwing us in a recessionary OR deflationary enviroment, yet.
Inflation response should be targeted at the fiscal level, hiking interest rates is too broad and counterproductive to effectively fight inflation. Central banks can't do anything about rents, supply shocks, monopolies or price gouging yet they actually end up contributing to inflation through more expensive loans and more deficit spending
Their decisions directly impact many of those things. Rents rise when interest rates rise, why? Landlords tend to fund their investments with debt.
@@glostergloster6945 if rents rise when interest rates rise that makes interest rate hikes an even dumber way to lower inflation. And no, interest rates wouldn't alleviate supply shocks, monopolies or price gouging
@@glostergloster6945 I think that was his point, the leverage of interest rate might work in some instances during inflationary periods, however, it may not affect some economic sectors to the same degree.
America should do what India did. Keep an inflation "target". Of around 4%. With a wiggle room of around 2 % on either side. Meaning, keeping inflation anywhere between 2 to 6% at all times. This will make companies more profitable, businesses will stay open, jobs will be available, and even though consumers will have to pay more for products, it will stimulate the economy in a way. Its a 3-4 year process, and takes time. The biggest problem in the US is debt. And this is a way for people to stop overspending on their credit cards. Economic stability begins with the citizens first.
Inflation of just 2% isn't sustainable for the US in this expensive global economy.
Greedflation, and shrunkflation have been the theme for the past 4 years. Central banks in raising interest rates cannot affect this effectively. Yeah, people might be working, but if there pay isn't keeping up with inflation, isn't keeping up with the rent/mortgage/utilities/the basics, then the social classes affected the most are feeling like they are in an economic recession.
Inflation is being caused by huge federal budget deficits and government control over 40% of economy, not private sector greed.
Well the pandemic and wars in the world are the root cause of this... The rest is just a political blame game.
Inflation is in money supply, not prices.
Outdated macro thinking with regards to inflation and interest rates isn't working anymore.
The regime has 110% changed.
It's not working you say? But yet global inflation has come way down with higher rates?? So how it is not working?
Feels like some are using an outdated playbook to address the current landscape. We understand enough to avoid certain catastrophes, but too little to establish a definitive guide on how to plot a reliable course forward.
So what has happened to weaken central banks' ability to control inflation? Deglobalization? Okay, maybe. You do make a plausible case there, but what else? Climate change? How does that work to reduce their influence? You do NOT explain this or provide any plausible mechanism. Yes a carbon tax might drive up energy costs and therefore also drive up inflation, but why would central banks not be able to respond with higher interest rates? This is not a well thought out video. You do not make a cogent case for the video's title.
Not a single thing wrong... Fed writes it... Get it?..
America spent 1$ trillion on interest alone in 2024.
F-35 ll program, the most advanced military program in history, costed 2$ trillion in 20 years, Afghanistan costed us 2$ trillion in 20 years. Now we spend 2$ trillion only in 2 years, for what? Not for another F-35 lll, but just for interest payments
I don't think comparing it to a military program is the gotcha you think it is. Compare it to social security or something.
@@ILoveTinfoilHats no, I'm comparing it to what achievements could've been reached with all that money.
@@Omer1996E.C 99% of people don't care what an F-35 is
Afghanistan was not 2 trillion it was around 300 billion but anyway, the US Interest paid on the debt is an important global tool, for exmaple during COVID people form all around the world demanded to buy US Treasuries as a safe haven. The USA cannot say no, go away. So it had to issue debt to maintain the power of the US Dollar and in return got to spend lots and lots of money and give out stimmy checks but it does now cost interest. It is just the way it is. But now rates are coming down so it should get cheaper for the US debt in the coming years.
@@Omer1996E.C without investment into the F-35 program and our ally, who will you blame when chinese J-20s fly over your head?
Its beautiful to see a country with that huge deficit speakeng about controling inflation with monetary policies. It's just plain and simple impossible.
If you put interests too low, it will maintein government afloat for a while and will erode society. If you do the opposite, it will maintain money worthing something, but will erode completly the government.
Without reducing the deficit, the course for America is to become like LATAM.
"Central banks might be the captain of the team but, they won't be the only player." Interesting take...some play checkers while others play 4D chess.
7:21 "All priced at". There's a Supermarket chain that recently announced that they would be experimenting with this type of technology in some of their store.
What he meant is that the central banks control demand side, when they raise rates it makes people take out fewer loans to buy cars, houses. That is DEMADN side. But if future trouble is in SUPPLY side, which is the factory side making cars, and construction of new homes, that is the supply side which can only be changed by Government laws, making house building easier, faster, less regulations, so you need Government policy to fix the supply side.
Lots of bs jobs = healthy economy = efficient capitalism?
Why ask about fed under Trump presidency but not about Kamala? Sus
nonsense.......
it is not 2%, it is 25% +2%, all the money printed has NOT been removed from the supply, basically the middle class has been destroyed and we are all atleast 25% poorer.
Dilemma that plagues central banks around the globe:- Prioritise growth or save people's savings and hard earned money. Make an economically rationale decision or politically correct choice. Market forces, political disruptions and geopolitical factors make it more complicated while heightening the stakes for all stakeholders.
I do not know why the fed did not anticipate inflation. In 2020 by June, supply had toned down as they adjusted to a lock down level of activity, then they started giving away stimulus checks and by Ber months you saw the inflation caused by excess liquidity flow through speculative assets such as bitcoin and NFTs. All of that was in 2020. We did not need to wait till 2022 to put measures to contain inflation but I cannot blamw the fed because their monetary policy decisions are always based on historical data just because that is the safest decision you can make and show to the public that there is reasonable basis thus they are in a reactive position and when they make decisions its impact has a lag time of 1-2 years and not necessarily immediate. It's immediate in publiccly traded asset prices but not to the real economy. I hope the fed would take a more future oriented approach in monetary decisions. They should rely on templates that we have learned in the past 300 years and recognize the stage of economic cycle we are so that they will b proactive
Yup. The Fed did a terrible job. Powell is one of the most incompetent Fed chairs we've ever had and that's really saying something.
Diversity hies
@@raybod1775 Always a racist somewhere
How does an Economist say aggregate demand does not affect aggregate supply?
And housing price has skyrocketed, that's the inflation nobody wants to own.
Right? The people with the top comments here are lauding the Fed for handling inflation so well. They did a truly terrible job. The housing market is destroyed for generations. Young people today will never be able to afford homes.
the economy is doing incredible given the insane shocks to it so idk how you can argue the fed didn't do their job effectively... the issues we're seeing now is that rich corporations can't borrow money as cheap so they're choosing to directly raise prices on consumers rather than taking advantage of them indirectly through capital leverage.
The economy is not doing well. Inflation has been insane and most Americans are living paycheck to paycheck. Young people will likely never be able to afford houses. I swear there are insane levels of bots in this comment section.
@@scottandrews947 most Americans have been living paycheck to paycheck for decades. Has very little to do with inflation. Young people could afford to buy property if the people with all the money stopped being allowed to buy up all of the property and outbid them! Do you realize how insane it is that half of the US population rents? If you can afford to rent a place, then you can afford to own it, it's simple math. I could also go on about how we spend 20% of our GDP on cars rather than just living close to work and necessities through denser development. It's not economical to live in massive separated homes dozens of miles from anywhere you'd ever want to go.
P.S. I am not a bot, but I'm interested as to why you think so...
@@Dullydude It's obvious that the Fed did a terrible to anybody that has an even basic understanding of economics. Yet, here you and so many others are shouting their praises. It's questionable at best.
The fact that they kept interest rates at 0 when our idiotic government printed 1/3 of the currency in circulation is a demonstration of extreme incompetence. Seemingly everybody knew what would happen except them.
And now that they have inflation under control (if you believe the numbers), they're immediately decreasing interest rates, which will probably ignite inflation again. Very bad policy.
Powell is the most incompetent Fed chair that we've ever had. Worse than Greenspan. Worse than Bernanke. He has caused the Fed to lose all credibility.
@@scottandrews947 touch grass dude
@@Dullydude Inflation is simple supply and demand. When the amount of money in circulation increases relative to the GDP of the country, the value of currency goes down.
During covid, the governments around the world shut everything down, so nobody was working, so GDP went down. That would be bad enough on it's own, but then they printed loads of money in the form of government lending and private loans.
When a nak gives out a mortgage or a loan, that isn't money from somebody's savings account that they are lending out, they make it out of thin air. This is what we mean by printing money, and it happens for personal borrowing, corporate borrowing, and government borrowing. But government borrows far more than anyone else.
Imagine that the whole economy/GDP is a bakery that normally makes 100 loafs of bread, and there is a total of $100 in circulation. Each loaf will cost $1.
Now imagine the GDP goes down - the bakery only makes 50 loafs, but there is still $100 in circulation. People still want to buy the bread, but there is less to go around, so people will pay more to make sure they get a loaf. Each loaf now cost $2.
Imagine the government see's that people are having a hard time affording the bread because it now cost twice as much as it did, so they print another $100 and hand it out. Surely now everyone can afford the bread because they have more money?
Wrong, the same amount of bread exists, and people now have more money, but that money is worth less. The bread now costs $4
During lockdown only big businesses were able to stay open, and small ones went bankrupt. Now all the extra money that was printed goes to the big business owners, who buy income gereating assets such as property, making it even more unaffordable for everyone else. This was entirely predictable.
Stimulus cheques and low interest rates helped a little bit in the very short term, but did enormous damage long term.
Maybe they should focus more on how the employment data is revised down month after month yet they use the initial readings to decide policy, maybe also stop pooling employed people into one group, someone who works one hour per week in America is considered employed, they are not adding much to the economy though, the Fed and BLS buff the numbers to suite their own agenda, if they took the real employment data they would have cut already, problem is they don’t want people to know the real numbers.
People need help to be happier with less.
Less government? Sure.
Appreciate the detailed breakdown! Could you help me with something unrelated: My OKX wallet holds some USDT, and I have the seed phrase. (alarm fetch churn bridge exercise tape speak race clerk couch crater letter). How can I transfer them to Binance?
They think the genie is back in the bottle. It's not. Inflation is alive and kicking. Gold will confirm it.
Interest rates on credit cards will not come down! They’ve been allowed to charge usury interest rates by the US Congress.
I am not from the USA but why would an "unbiased" media company undermine a political candidate rather than the other?
They lost all shame
What are you talking about??? This was a bout FED not about politics. Are you a bot?
Shoot, I didn't even see it, they were talking about Trump but they didn't say sh*t about Biden nor harris🤯
@@drscopeify They said Trump policies would damage things. That is clearly biased because half the population does not think that (they think it would improve)
@@andreasdelawareRegardless of what people think about trump... His policies would increase the inflation... Just because he frame them as "pro american" doesn't mean they are sound.
Just ask any economist instead of media/politicians.
Also you got to snap out of the illusion that US president runs the world.
@@anderslagerqvist2642 I am an economist, best of my year in my country and that is a lie
Interest rate is the wrong tool, period, Targetted taxation of the investor / speculator class is the correct tool to remove heat from an economy.
That’s all on Congress and administration. How about ending wealth transfer from working class to lazy class?
Yeah but look at Trump and Biden and Kamala they are all trying to offer lower taxes instead of balanced taxes. It's just not popular and wont win elections saying we need to balance the tax system. Big issue
@@raybod1775Lazy class = investors?
i think some youtube channels produce better content on inflation than this one ............
Although Inflation problem was set off in 2020 during Covid, but from 2022 during war it shifted from monetary to political inflation, so political tools have to be used to handle this inflation not monetary ones.
No. The opposite. They just need to stop postponing the inevitable. If they continue like this, inflation will for sure set in. If not already doing so.
It's a facade.
Remember the 20% interest rate?
America should do what India did. Keep an inflation "target". Of around 4%. With a wiggle room of around 2 % on either side. Meaning, keeping inflation anywhere between 2 to 6% at all times. This will make companies more profitable, businesses will stay open, jobs will be available, and even though consumers will have to pay more for products, it will stimulate the economy in a way. Its a 3-4 year process, and takes time. The biggest problem in the US is debt. And this is a way for people to stop overspending on their credit cards. Economic stability begins with the citizens first.
Lots of lies in this video but the core reason for increasing the money supply to make sure the rich stay rich.
Who tf takes Credit Card debt? 🤣 20% are you insane?
the sheeple you meet every day.. most of them are in massive debt and have no clue how they got there or how to get back out
@@servethesongsmoney is debt all money is created through debt.
@@servethesongs not where I live in the EU.
The people that are house broke/car broke are the ones turning to credit card debt to buy food and other necessities.
And yet US credit card debt stands at $1.14 trillion. Some is due to people being in tragically difficult situations. Some is pure irresponsibility.
Three title changes??
CBs job is like a fortune-teller.
They know the past.
They barely know what happened 3 months ago (where they keep revising the figure in the months ahead).
They don't know what is happening know, often assume or guess.
They try to predict the next 6 months.
They have a slim idea of where the economy may be in 12 months.
They have one big control knob to react, which is monetary policy, which in a sense regulates demand.
The other big control knob is on government, with fiscal policy.
Just like with Tango, it takes two to dance and this is the problem.
With advanced economies with record high tax revenues, high public debts and low productivity (Europe) and middle class income families struggling to pay their bills, adding more taxes and or protectionism on the supply side will potentially, most likely increase inflation. This also leads to more populist candidates as we are seeing everywhere.
Where is the next China? Vietnam? Bangladesh? India? Indonesia?
Yo-Yo inflation is here to stay.
The question is, what will happen with the job market?
Just keep stagflation at bay, otherwise we will have a Lost Decade in Europe.
my walmart sample cart is +5% MoM
They’ve kicked the bucket at least twice now…2008 and 2020. Either the markets are allowed to rupture and heal, or we print the USD out of relevance.
Why say dis-inflation when deflation is a word that exists?
Deflation is seen as bad... prices demand and wages drop below the target. Dis-inflation is meant as a way of saying "slowing inflation and stabilizing it at a manageable target of 2%/year". We want growth but not as hot as we were running.
Deflation is negative inflation (prices falling). Disinflation is lower positive inflation (prices rising more slowly).
Because, and stick with me here: they are different things. Deflation means a lowering of price level (or "negative" inflation percentage wise across the board). Reduction of inflation means a reduction in the increase of prices. So if inflation goes from 5 to 2% it is disinflation, only if it goes to -5%, meaning things start getting cheaper across the market (bad thing for the economy and a lot rarer) that the word deflation is right. There is no current deflation and pray for there to not be one because you will notice the difference of what they mean then.
Welp, I definitely learned something new:)
Deflation is bad for those who have lots of borrowing, like the government and big business. Deflation is not a problem as long as it is a only small amount, just as with inflation. Economist will tell you that unless we have inflation, nobody will spend any money and the economy/GDP will collapse into recession, which is of course nonsense.
China is not getting expensive. Chinese workers are choosing to work for Chinese companies instead of American ones.
Chinese workers always worked for Chinese companies. American companies don't own and operate factories in China, and never did. They just order from local factories and sell the stuff in the US or elsewhere. Not even Apple owns any factories in China.
what other players do you mean?
In the United States, some combination of Congress and the executive branch. They're basically alluding to (currently not fully realized) automatic fiscal response tools like sending out checks in a downturn, as happened during Covid, or similar options to restrict demand when inflation is high
they did exatlcy what they planned, its all going or acordingly
Corporate greed
Confusing and very, very poor explantio. Unless it was made on purpose, otherwise terrible job guys, sorry
Nobody cares
Governments should get back in the buffer stock game
Inflation is better than deflation. What would have happened if the governments had not stimulated the economy during COVID lockdowns, job losses, and supply chain disruptions?
Inflation is not better than deflation. This is a myth that is perpetuated by corrupt politicians and incompetent economists. Inflation only benefits asset owners. Young people would benefit significantly from deflation.
It was a self made problem. Lockdowns did very little to stop covid, but did huge harm to the economy, and then they made it even worse by printing loads of money. Worse for us that it - the rich and powerful benefited immensely.
Isn't it unfair to say the CBs won the battle but lost the war against inflation when already in the video the narrators tell it's beyond CBs power? It is like saying Michael Jordan won an NBA championship but lost an NFL one. How could he win that? A more fair thing to say is that, there are other factors at play that effect inflation. Rates alone may not be the best tool to control that.
The crucial thing is that we're talking about FED rates. So it still has an enormous power. So down playing it is very premature too.
Oh how easy to spew BS like this. I should've been chief economist in Bloomberg or something. Nobody really asks for proper proof or data to back your claims anyway.
Inflation taming is more important than economic growth. Economic growth is bad for the environment.
Watching youtube is bad for the environment.
Its afraid.
1:36 Why blookberg put lieing man on screen?
@aswathdamodaran