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Inflation & Deflation 3: Obama Stimulus Plan

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Uploaded by on Mar 30, 2009

Is the stimulus large enough to offset the demand shock caused by the contraction in credit? Will it lead to inflation?

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  • Im not buying the deflation argument. When you print nothing out of thin air with no productivity, you will debase the currency. I dont care how much credit is contracting. Everytime I go to a restaurant prices keep going up. Gasoline is back up, insurance costs, cable, everything, is all up. Nothing is coming down. Even books are skyrocketing. The only thing going down is housing and that is because it was so overvalued. Thats not deflation, thats reverting to the mean.

  • Ron Paul 2012... our only hope of fixing the economy

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  • Pitty it's in such a poor resolution =((

  • VOTE KHAN FOR PRESIDENT IN 2012!!!

  • Fiat Currency and Fractional Reserve Banking system = fraud.

    How? If the actions of one person affect your wealth without your consent, it is stealing. It's that simple.

    There are two problems with FRB, specifically:

    1) decrease in wealth:

    Since lending out money one does not have increases money supply which equals loss of currency value.

    2) possibility of bank runs:

    If everyone want there money back, and banks do not have it - bank run. This risk does not exist with a 100% reserve.

  • @30percentplusreturns That is because you do not understand economics. That's why you don't buy it. Keep learning from Sal.

  • Fun fact: In 2007, the inflation rate was 4.08%. This was higher than any year since 1990. By the end of 2008, the inflation rate was 0.09%, the lowest rate since 1954

  • @alonelychild Sal Khan

  • Khanacademy, what do you think would happen if the current bubble the FED is creating has to be burst by a shof of interests a la Paul Vocker? 20 somethint percentage year on short-term debt? To the real economy, taking into consideration the debased industrial base of US, the debt addiction and net interest costs in budget?

    Do you think a sovereign default is possible in the next 10 years?

  • What is your name narrator of khanacademy?

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