And, as a side note, it should be added that the real interest rate - as measured by TIPS - only began to seriously spike after the interest on reserves policy was announced, and that the stock market only began to severely crash when the interest on reserves policy was announced, in early October 2008 (not in mid-September 2008 when Lehmans collapsed as most commentators have presumed).
However, if the Fed pays interest on reserves, as it began to do in early October 2008, the money that it injects through quantitative easing will be neutralized, as banks hold on to excess reserves.
buy silver.
firefox666moll 3 months ago
@CollectiveCheckup
I do: it doesn't.
poorperson 3 months ago
Do you give a lesson on how the FED steals from us?
CollectiveCheckup 4 months ago in playlist More videos from khanacademy
You are a brilliant presenter. You wouldnt comprehend how much your videos have taught me. Keep up the great work, Sal! YOU ROCK!
1dducks 7 months ago
And, as a side note, it should be added that the real interest rate - as measured by TIPS - only began to seriously spike after the interest on reserves policy was announced, and that the stock market only began to severely crash when the interest on reserves policy was announced, in early October 2008 (not in mid-September 2008 when Lehmans collapsed as most commentators have presumed).
WilliamWykham 9 months ago
However, if the Fed pays interest on reserves, as it began to do in early October 2008, the money that it injects through quantitative easing will be neutralized, as banks hold on to excess reserves.
WilliamWykham 9 months ago
thanks for this clear explanation
kuhan1870 9 months ago
Wow. Thanks for an amazing video
SpotRatio 9 months ago
thanks for the video Sal now i know what the Federal Reseve does with QE
mikeroweRules12 9 months ago