In economics, a depression is a sustained, long-term downturn in economic activity in one or more economies. It is a more severe economic downturn than a recession, which is a slowdown in economic activity over the course of a normal business cycle. That is the classic definition of a depression. Right now we are on the brink of such an event, and the Fed is trying to use low interest rates to counteract this outcome. In this video I will explain why this is happening and how the FED is planing to solve the problem with lower interest rates, and mostly, if this is going to work.
By Stock Chat
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Economics 101 states that printing money will lead to inflation in the long-run but QE is wholly unconventional in the sense at central banks started paying interest on member banks excess reserves and lend at interest rate, creating a corridor to set the rate they want in the market. And when the interest rate hit the floor, the rate which central banks pay to commercial banks, then banks will never lend to marketplace at rates lower than the rate they are being paid by the central bank. We call that 'demand for excess reserves being infinity elastic' with no opportunity cost. In order words, any volume of reserves (printed money) can remain on balance sheets indefinitely without increasing inflation. Since banks are reluctant to lend, or output pacing printing (very unlikely) there is low chance of inflation in the near future. We are actually trying to fight deflation
However, I like that you are speaking and educating your audience about such topics 👏🏾
There is no saving money! Everything goes to paying bills, food, medical expenses, car expenses! Saving money is no longer possible! No disposable income!!!! No livable wages!!! Pandemic is killing more people than the civil war!!!! SMART Americans will ignore and avoid all congested places and businesses that open! Foolish are those who will die of Covid19!!! X ( another virus 🦠 will be unleashed very soon on the masses ) by the 1% elite!!!! US Monetary System is fake and run by Private elitist Federal Reserve Banking System Of Death!!!!!!
Do a story on the "Federal Bank" as you call it.
Get ready for New World money with New World order rite behind it.
It's a truck on a mile decline with no brakes…
Basic economics 101 inflation and interest rate correlation has been broken for 12yrs.
No bullets left in chamber- we saw oil trade in negative territory, next is interest rates- I'm not going to spell out the future simple search will forecast your future.
I don’t think anything can stop what’s coming now, we are already past the point of no return.
Stagflation with Indeflation, sounds like awesome.
Tom is a voice of reason in these mad times 😉 good job!
I worry about all the bullshit that the US government is doing..they need to be straight and face the problem instead of adding bandaids
Will it end up like Europe?
No the UK Banks did this and their economy got worse! The only way to recover from this shit situation is to back the US dollar with all forms of commodities including cryptocurrency!!!
Stagflation!!
Great Tom
awsome that was helpful love your videos
We're not going to the land of milk & honey anytime soon in our 🇺🇸 USA corrupted Country. We really are living in the beginning of the end times. Jesus really will return for His forgiven body of Christ followers soon. Repent for the Kingdom of Heaven is at hand!! 💜💃🙏