Banking 13: Open Market Operations

Banking 13: Open Market Operations

Tools of a Central Bank to enlarge a income supply.


23 Responses to 'Banking 13: Open Market Operations'

  1. jakebarnes28 - April 4th, 2010 at 11:42 am

    Rothchilds!? Don’t forget the Illuminati, Bilderbergers, et. al..!!

    Funny how it would seem folks are genuinely astonished to discover the risk factor as it relates to finance and how finance relates to the state.

    Weird.

    Great videos! Thanks.

  2. silanath - April 4th, 2010 at 11:42 am

    many many thanks.

  3. personova - April 4th, 2010 at 11:42 am

    Confidence is another way to say how much risk. If you buy a Treasury in current dollars, what is the confidence that you will be paid back in dollars at equivalent worth when the Bond Matures? What are the risks that the US will not debase the currency before your Bond Matures?

    The US roll over in debt is very sensitive to interest rate changes. This is a risk.

  4. Pantz104 - April 4th, 2010 at 11:42 am

    Also it’s not just the federal reserve that purchases these treasuries (bonds, debt) but individuals and other countries. China for example owns $1 out of every $10 of U.S. public debt. Check out Warren Buffetts “Thriftville vs Squanderville” example, it can be found here on Youtube.

  5. blahdelablah - April 4th, 2010 at 11:42 am

    Seems to me that if you control a large enough portion of treasuries you also control the government (through blackmail), so if the Fed can buy as many treasuries as it wants, it can gain a higher and higher percentage of the total treasuries. Treasuries require that the government pay interest as well as the face value, so more treasuries = more government debt, and the gap is filled with taxes. So you have infinite money supply (Fed) vs total possible taxation. Am I missing something?

  6. SadeTabitha - April 4th, 2010 at 11:42 am

    Nice try. Keep it up check out esteembpo + com for social media marketing. vfvghfs

  7. caveltor - April 4th, 2010 at 11:42 am

    The inference seems to be that increasing the reserves subsequently increases M1. Operationally the causation is the reverse. Banks make loans without regard to reserves. Reserves are borrowed later if necessary.

    Consequently the reverse is also true. If the bank can find no good loans to make, because say the economy is crap, then no loans are made. The fed can increase the reserves, wont make any difference to M1.

    Banks are not constrained by reserves. Reserves are a tax on the banks.

  8. likeriver - April 4th, 2010 at 11:42 am

    yea same here

  9. jackuy12345 - April 4th, 2010 at 11:42 am

    very good keep them up~!

  10. ananiasacts - April 4th, 2010 at 11:42 am

    Cause it’s secretely owned by the Rothchilds?

  11. carracer481 - April 4th, 2010 at 11:42 am

    very good, very understandable, the only thing is is that the federal reserve actually does make money! HELLO but other than this it’s good.

  12. 20000miles - April 4th, 2010 at 11:42 am

    To suggest that the government can lower interests simply by printing more money is what one economist described as “ordinary, man in the street economics”.

    I love the dissection of how banking works, just be careful when presenting theory when there’s a good chance it might not be correct.

    [The part I'm talking about is at 5:09 onwards]

  13. 20000miles - April 4th, 2010 at 11:42 am

    I’ve watched all the videos up until this one, and this is the first error I’ve noticed.

    Sal appears to be putting forward the theory that interest is a puerly monetary phenomenon. I submit that this is simply not the case, and that the interest rate is an intertemporal price that expresses information about the preference of present goods over future ones. An economy can function with any level of money supply – the price level will adjust to fit the MS.

    (continued above)

  14. BroAbdul - April 4th, 2010 at 11:42 am

    Sal, you clearly believe time should not simply be consumed but invested. I really am benefitting from your videos. Interesting to learn that derivatives of f(x) = e to the power of x, like Bilal, repeat 1. I understand how buying treasuries, the Reserve Bank can put cash into the system. What prevents the seller from depositing or investing outside the system? Is not more money be printed for no benefit for the domestic system, in this scenario?

  15. gwynedd1 - April 4th, 2010 at 11:42 am

    How much they think they have….In a fiat currency what is the reason we have such a fraudulent and barbaric system? Are we running out of digits on the computer?

  16. Boxmanboxman - April 4th, 2010 at 11:42 am

    I was able to follow the first couple of videos with relative ease, however now my mind is beginning to explode, I’m finding I have to watch these videos over and over to grasp the concept.

    But thank you so much for these videos as I am sure the written material on this is 100x more mind boggling.

  17. Roshibear - April 4th, 2010 at 11:42 am

    then you go on to interrupt your point serval times to reiterate that yes the capital can take the form of either actual notes or a checking account.

    Sorry for the criticism, because again I am thankful that you’ve bothered to make these videos at all, but honestly sometimes they hard to watch.

  18. Roshibear - April 4th, 2010 at 11:42 am

    First off thank you for these video. They are immensely valuable and informative. However, because you take such great pains to explain everything and reiterate the same points over and over again, it ironically becomes harder to follow having deferred from arriving to the actual point for so long.

    For example in this video after mentioning that bank can take receipt of notes from the reserve bank or simply have the reserve bank create a checking account…

  19. HitmaNmofka - April 4th, 2010 at 11:42 am

    To Pongman
    Federal Reserve is ran by 7 members (The Board of Govenors) They are appointed by President and confirmed by senate for 14 year terms. They get long terms to stay independent from political pressure.

  20. smallbighorn - April 4th, 2010 at 11:42 am

    why in the world would we stop using credit cards? Much easer then debit cards, I always use my credit card. Don’t have to worry about how much money you have in your account.

  21. Casper48022 - April 4th, 2010 at 11:42 am

    I have a question to the creator. Ever seen “A beautiful mind?” :P

  22. pongman - April 4th, 2010 at 11:42 am

    So who regulates the Federal Reserve? Is there a government entity that is in charge of the Federal Reserve?

  23. jdrizd2 - April 4th, 2010 at 11:42 am

    I guess the scary part is when the government has to borrow money, from whom I don’t know, to cover the treasury obligations that have come to term.


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