Lesson 3 - Inflation Explained [pt. 4]

http://bit.ly/JjZFU - Obama's Unlimited Social Security Tax
http://bit.ly/Iv6Y - Bernanke on 60min.
http://bit.ly/SHPRR - The US Misery Index

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[KumoOtokoZero]

I have heard about types of Real Rates?

ex-ante real and ex-post real, can you clear those up?

[BasicEconomics]

real rate of return is adjusted for inflation.

So say if you were going to loan a friend $100 for a year, and you wanted your real rate of return to be 10%

So you would take 10% + your expected inflation rate, let's say 5% and charge him 15% interest.

That is your real ex-ante rate

now let's say your friend pays you back at the end of the year and inflation was actually 6%

your real rate of return was 14% and that is know as ex-post real.

look up the fisher equation.

[Viktorsiable]

Your lectures are outstanding

[CookaChicken]

amazing stuff i hope i get an A for my macro exam

[simanek79]

Remember, if you keep your money in a bank you allow bank to expand money supply, so you allow it to create inflation causing loosing purchasing power of your money.

We're In debt society, debt can't be repaid. To pay for an interest you need to create more money and the only way how to create more money is to create more debt.

[maroza07]

tnx man

[curiousfiboo]

The Fed/Bernanke is right by saying that the US still has a room to increase money supply now and raise interest rates later. There are international forces at work & international dimension to the working-out of this scenario lately let alone the burgening bonds market in Africa.

[formeyousee]

It comes from existing money that's already circulating in the system. That's why every time you create money in our debt based system you automatically add to the national debt.

It's like borrowing money from a loan shark and you go to another loan shark to repay the first loan shark. Then you go to a 3rd loan shark to repay the 2nd loan shark, and on and on...

In this case the Federal Reserves is all of the loan sharks combined into one.

As long as there is a Fed we'll always be in debt.

[unomark]

I apologize if you've answered this question already.

In a fractional reserve, debt based monetary unit system where principle is created but principle plus interest must be repayed, where does the interest come from ?

[707hoser]

Thanks for posting these videos, I really enjoyed them. I agree about Keynes except that Keynes said that governments should spend in times of recession and put money away in good times. Governments are forgetting this side of the equation. Also I see inflation as a redistribution of wealth from the weak to the powerful. Some people are robbed of their purchasing power which is transferred to others. Of course, governments gain most by inflation due to bracket creep.