What is quantitative easing? (funny video)

I’d not seen these guys before, but they’re quite good. The Australian comedic duo of John Clarke (though he was born in New Zealand) and Bryan Dawe explain global economics on their YouTube page. In this video, they explain “quantitative easing” – the policy the US Federal Reserve, and the Brits, have been following to help fuel the economy for several years now.

Chris isn’t a big fan of quantitative easing. Neither is Joe Stiglitz.

what-is-quantitative-easing

I’ve never really understood what quantitative easing is, but these guys do a funny job of explaining it, briefly and painlessly.


Follow me on Twitter: @aravosis | @americablog | @americabloggay | Facebook | Google+. John Aravosis is the editor of AMERICAblog, which he founded in 2004. He has a joint law degree (JD) and masters in Foreign Service from Georgetown (1989); and worked in the US Senate, World Bank, Children's Defense Fund, and as a stringer for the Economist. Frequent TV pundit: O'Reilly Factor, Hardball, World News Tonight, Nightline & Reliable Sources. Bio, .

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  • http://www.americablog.com/ Naja pallida

    The whole point of the Fed was to soften the landings of the banks lurching from one crisis to the next. The problem is, it required significant banking regulation for it to work effectively – namely things like Glass-Steagall – to mitigate the damage. Almost all of those regulations have been removed over the last 20 years or so, and the banks have gotten comfortable in the soft landing they were granted, and don’t want to bother moving anymore. Whereas before they would have been required to, or risk interest rates going up. The Fed has been abandoned as the only hope we have for preventing an economy-wide collapse every time the banks decide to take another shit on us. Yes, this is overly simplistic for a complex problem… but you get the idea. There is a reason why knights wore a shield and carried a sword, because with just one or the other, you only get half the job done.

    I do believe auditing the Fed is a good idea. In fact, I think everything they do should be a matter of public record. Every time Bernanke farts, I want it accounted for, so we know exactly what is going on and they are held entirely accountable for their actions. The idea that they are some nebulous entity that is making grandiose decisions in smoke-filled board rooms that impact our entire economy is preposterous.

  • http://adgitadiaries.com/ karmanot

    Quantitative Easing is like playing low income Monopoly and being able to place four trailers on Park Place or getting out of jail by paying for a plea bargain.

  • Sweetie

    “It’s easy to jump on board with the ‘Ban the Fed!’ crew, and laugh at quantitative easing as a policy… but without it, we’d really be up a creek without a paddle at the moment.

    As long as interest rates remain at nothing, and all this free money is being thrown around, they have absolutely no vested interest in doing anything to actually improve the economy. It’s easier to just line their pockets and laugh in the face of Bernanke.”

    So, what, exactly, does it accomplish to have the Fed? Aren’t they the ones who have set interest rates so low? Also, isn’t auditing the Fed a good idea, and having some public/governmental accountability/control?

  • Sweetie

    Greenspan in 2004:

    “We run the risk, by laying out the pros and cons of a particular argument, of inducing people to join in on the debate, and in this regard it is possible to lose control of a process that only we fully understand.”

    translation:

    Don’t let the foolish public know about this and make as much money as you can with our insider information.

  • Sweetie

    Guess why the plebs “own” 80% of the debt, and their primary “investment” is in housing.

  • keirmeister

    Lewis Black has an Australian brother?

  • http://www.americablog.com/ Naja pallida

    It’s easy to jump on board with the “Ban the Fed!” crew, and laugh at quantitative easing as a policy… but without it, we’d really be up a creek without a paddle at the moment. The problem with the last 20-25 years of macro economic policy in this country has been that every time they “print more money” the only people who get that extra money are the banks, hedge fund managers, and corporations that are making a fortune off of stock prices. The rest of us see nothing, actually less than nothing because they take even more from the rest of us. As long as interest rates remain at nothing, and all this free money is being thrown around, they have absolutely no vested interest in doing anything to actually improve the economy. It’s easier to just line their pockets and laugh in the face of Bernanke. Just proof that the Fed is entirely toothless without significant bank and market regulation.

  • nicho

    Money is what the king, queen, government, tribal chief will accept in payment for taxes. Always has been.

  • http://AMERICAblog.com/ John Aravosis

    Hadn’t seen this one, will watch, thanks

  • jared

    This one is truly my favorite on QE. And spot on in accuracy.
    http://www.youtube.com/watch?v=PTUY16CkS-k

  • http://www.rebeccamorn.com/mind BeccaM

    The only detail not made clear in the clever skit: The only people allowed to be outside that window through which the copied currency is dispensed at high velocity are the banksters.

  • Dave of the Jungle

    Oh, Crikey.

  • UncleBucky

    Quantitative or Quantitive Easing? :)

  • LosGatosCA

    It’s all ‘pretend’ money, that’s what the folks who try to make economics a morality play don’t want the regular folks to understand, or worse, they don’t understand themselves.

    Money is a just like a check, it’s a promise to cash the check by producing goods and services when it presented. As long as that happens, society can produce goods and services to match the ‘pretend money’ everything works fine. But when there are disruptions like the housing bubble, sub prime fiasco, then the players in the system point out that the goods and services being offered are not worth the ‘pretend money’ value we agreed upon in advance, then the system breaks down.

    But the folks running the casinos don’t want the suckers to know that the game is that simple, they need to make it much more complex, driven by some ‘immutable laws’ of economics. In fact, it’s just a set of social agreements between parties that can be changed, fine tuned, improved, or degraded at any time. If you’re motivation is to keep the ignorant sheeple as docile and cowered as possible then you end up where we are now. If you’re motivation is to lower unemployment you’ll use that pretend money to buy real infrastructure of value, provide real jobs, and increase inflation to lower the real debt that was exchanged for worthless assets in the past.

    Money is just what we agree it is backed by current future capacity to produce goods and services. Those agreements are subject to change at any time and without warning. When they do change, the bankers just want to make sure the sheeple get the shitty end of the stick.

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