Prof. Antony Davies: Why Not Print More Money? 

Printing extra money? Worked so well for Zimbabwe.

In a way printing more money is stealing.

Another thing to consider is that if there is too much money out there without us knowing it, goods get sold too often and we run out of resources needed to produce those goods pretty soon.

this is literally the only youtube add i listened to the entire way through, good video

I love learn Liberty and Antony is by far my favorite presenter!

You do a awesome job explaining this subject 👍 really nice Professor 👍

You had me at money = beer

My sister said this once in an argument about the economy, I just oh boyed my way out of the argument and ended it right there

Another point about printing money is that your income does not rise as the value of the dollar falls. This means that the $4 combo from Mcdonalds is now $7 while wages are still similar.

Isn't QE effectively the same thing as printing money? use it to buy stocks and bonds?

concise and simple explanation . nice video

Awesome video!! A simple straight forward explanation.

I find the tuition comparison to be a bit nonsensical, not because there was no college, but because first rule of economics is something is only worth what someone is willing to pay for it. Without "paper money" or credit, no one could pay that much for college and therefor it would not cost that much.

"Cavemen aren't able to save for college because chickens don't last long enough" r/brandnewsentence

Absolutely Amazing Video!

very precise and well explained

Money won't create success, the freedom to make it will-Nelson Mandela

I wish he commented that the FIRST people to get the new money are able to bid up goods and services, and the LAST people to see the new money in circulation suffer through raised prices before their wages or savings goes up.

Nailed it Sir! Great concept

I understand inflation quite well. I've undertaken great research in the field, as price control is a central tenet of Post-Keynesian economics--the study of modern money and how everything actually works.

Well, the caveman could go to Devry for roughly 10,000 chickens. So there's that....

But money is all in our heads. We can change the value of something at any time we like...its called yard sales (etc). Its all an invention to keep us inline and not see our true selves. Inflation is also a man made concept. So can't we get rid of inflation? Instead of someone commenting that im a moron for saying this can you give me a logical reason as to why I am wrong

That is a pretty good explanation of how money works in a short but good video explanation. Now its just getting people to understand what this man is saying.

you hit the nail on the head. I was thinking that too. Still an informative video.

But why do we let private banks create as much money out of noting as they like? Which causes massive inflation, especially in housing? Then the nation gets enslaved to the bankers, aka, the 1%, aka, the ruling class who own the banks. Why don't we create our money supply ourselves, and at almost cost free, through a public body instead, or at local regional public banks. It 's easy to keep inflation down by only making enough to cover the country's transactions and no more. Don't listen to bankers who try tell you that public created money causes inflation, because they are bound to tell you that, aren't they, as they have an ulterior motive (they want you give them loads of your hard earned money - for nothing? Google for the free book, Billions For The Bankers, Debts For The Rest Of Us, by Sheldon Emry, an evangelical Christian. A really nice guy. From the back cover of his book: Billions For the Bankers And Debts For The People: What if? .What if you were no longer required to pay income tax on your salary, profit on the sale of your private residence or inheritance tax. .What if all Americans' living standards could be increased 25-30% without any increase in man hours worked or increased taxes. . What if Medicare and Social Security were completely funded with no increase in taxes. .What if the possibility of going to war could be reduced by 80-90%. .What if unemployment dropped to near zero. From inside the book: War and religion can be used to conquer a nation but it doesn't last. The third method can be called economic conquest. It takes place where nations are placed under 'tribute' without the use of visible force or coercion, so that the victims do not realise do not realise that they have been conquered....

Bitcoin

good point. very good point.

Definetly one of the best.

The money system is still flawed. Greedy men control the system.

Can you guys do a video on how the US government's calculation of the nation's inflation has changed over the years? Thanks, love the videos!

Great vid!

I agree, mostly. As inflation increases, the relative cost of your fixed mortgage goes down, and that’s a pretty large chunk of most people’s monthly expenses,

Well explained!

This video has a lot to improve. More clarity is needed but is good enough.

just a simple question... why would be double the price of service after we double the amount of money?

Great video!

Ok, i understand all of the economics behind the money supply; inflation and so fourth; however, i was asked a question which perplexed me a little bit considering most of what i learned about money supply in taught over large scale money printing (in the billions) Surely, by printing £20 million and giving it to hospitals paying for staff to remove any need to cut jobs surely would not cause inflation in an economy worth $3 Trillion? Anybody mind explaining why this may be wrong?

In Jamestown, during the American Colonial period, tobacco leaves were used to buy goods and services (barter). Eventually, there were warehouses established that issued notes for depositing the tobacco leaves in the warehouse (sounds like a bank eh?). Those notes that were issued were essentially money. The problem was that the more people that grew tobacco, the more inflation was produced, which increased the trade rate for other goods and services.

Someone knows of Steve Keen and/or Positive Money, I see. :-) Fantastic!

It can also be viewed as a hidden tax. You erode the value held by everyone by printing more money.

This is simple but should be he basis of understanding the concept and operation of money in economies at it's fundamental level. Nothing changes this concept but loss of this conceptual understanding leads to a lot of misunderstandings and illusions whivh these concepts can help to quickly disprove..

True, there are consequences in such price changing, since money is the object of 1/2 of nearly every trade of economic goods - but this is a different argument then one regarding "value" of commodity imputing "value" in a currency.

profit is not the only way to let you tell about your preferences. also, the possibility that your taste changes remains all the time, even in the market economy, which doesn't react excactly fast to taste changes

Nice counterargument.

I think you just answered a qualm I've had with the recent recession for a couple of years now. So the reason artificially low interest rates aren't causing a boom right now is because although the money supply is increasing, the velocity is stagnating, while during the housing boom there was both low interest rates and a high rate of velocity. That makes perfect sense.

Best channel of youtube

Antony Davies is the man!

Part 2 - The price of gold and silver is actually VERY constant, when you measure them in terms of other commodities. While there are fluctuations, on a relative basis every commodity trades roughly parallel to every other commodity. The dollar price of commodities fluctuates wildly, because the supply of dollars fluctuates wildly and speculative investors (especially in the derivative market) use this to their advantage to grossly manipulate the dollar price of those commodities.

Great Post! Deflation favors savings,Inflation favors debt. A healthy economy needs a balance between hording (currency accumulating value without circulating) and malinvestment (an over expansion of credit). Imo,the whole system is flawed because of reserve lending. Since banks create the majority of currency,it's very difficult to determine the optimal quantity of federal money. The result is that our monetary practices resemble a ping-pong game,with the Fed batting the ball back and forth =/

The best Learn Liberty video I've seen to date.

I been wanting to know amd i still dont get it can u do a 3rd grade version

2.b The speed of the change of price throughout the market completely depends on the aggregate increase in supply - a little increase in supply may not increase prices at all if the additional supply actually fills an unmet demand within the market, for example. Further, how much inventory exists vs. the consumption? A good example is gas prices - where the production is tightly matched to the current consumption. (3b)

3b. So that in gasoline prices, a sudden glut of fuel is almost instantly observed in a fall in gas prices at the pump within a couple of days and equally a sudden shortage (say, a refinery goes down), the price of gas at the pump, within a day or two across the whole economy, suddenly goes up.

I been reading your comments and the comments other people left you. I come to realize that many of them do not know that Neoclassic and Austrian supply side models are based on a competitive market. One reason why I am very supported of Post-Keynesian is because they take into account imperfect competitive and competitive markets. Post Keynesians are the ones who edit the Neo-Classic growth theory by adding Technology is the key input for growth in developed countries.

Thanks! You've been of great help. Just curious--are you an adherent of the Austrian school, or are you slanting more towards Keynsianism?

simply superb

Dispensing with the bailment and looking at the currency as money, it is up to the entity that manufactures the money to determine what they choose to price that money in any trade, since it is not a bailment. So the manufacture of currency money could, on a whim, declare they would - instead of 1 unit for 1 oz- change its price to 5 units for 1 oz. Since both the currency and the other good are independent, this is no different a changing the price of any good or service in the market.

Another good video, but still too many people who refuse to understand basic economics.

Part 5 - A key thing to note, though is that there are 2 markets when you talk about PM's. The PAPER market, which is set by the price of paper representations of metal - in the form of derivatives, ETF's, etc. and the PHYSICAL market, which is the market for real, in your hand metal. The price, for now, of both markets is set by the paper market, which is grossly manipulated, however, the PHYSICAL fundamentals absolutely scream that the dollar price should be MUCH higher.

Also, that equation is referring to Goods *sold*, not the *Supply* of Goods, which is what the professor referrs to in his example. If the Money Supply increases faster than *Supply*, Price will go up as well. This is because an increase in Money Supply creates an increase in Demand which in turn, apart from an increase in Supply, creates an increase in Price.

What determines V, then? A higher rate of investment, consumption...? I'm assuming a deflationary phase where resources remain idle, and people don't consume or invest is what entails a slow V?

Surely it doesn't solve the retention of value issue? The value of money deteriorates over time due to inflation, or is this not described by the retention in value issue? Someone explain...

Very interesting video. Just because you have more pieces of paper doesn't always mean you have more wealth.

Please demonstrate the difference between a "debt" and an "IOU".

Name 3 places and time periods please.

So how do we cause deflation

I'm not an economics professor, but it seems to me that the value of money is determined by.. the perceived value of money and goods. No one is going around counting how much money is in the system, but 'individuals' are looking at other individuals, and determining prices off of that. I'm a little confused about what exactly causes inflation. Is it the knowledge that money has been printed which raises prices or a physical awareness that more money is being spent?

can anybody tell me what is the difference between QE and printing money? I know QE is not physically printing money? then how do government buys bonds from the banks? and Bernanke said in 60 minute that the money in circulation remains the same?

I was referring to A. Mitchell Innes, "What is Money", 1913.

Like I said, its hard to measure because there was no concept of GDP during the 1800s. There is a wikipedia page that lists all the recessions in the history of the American economy, and the pre-fed depressions saw large declines in "business activity", which is similar to lost production.

Rereading your post: too many negations of negatives I initially read that you said there is not enough commodity, but in the re-read are you saying there "is no such thing as not enough"?

Additionally, increase in commodity with a static stock of currency changes the PRICE of that stock of currency as per the law of supply and demand - more of the commodity money decreases its price - but as we are reference PRICES by the that commodity money , the effect is that it will take more currency to trade for the same amount of other goods (inflation). There is never a necessity to bind quantity of currency and quantity of commodity money.

Antony Davies is an American Hero

Carl Menger developed an anachronistic fable that individuals developed money as an outgrowth of barter, seeking a convenient store of value and means of exchange. The reality is that money was developed by cost accountants in Bronze Age Mesopotamian temples and palaces, mainly as a means of denominating debts. (See Michael Hudson’s forthcoming book, The Lost Tradition of Biblical Debt Cancellations.) Few transactions during the crop season were paid in money, but took the form of personal debts mounting up to fall due on the threshing floor when the harvest was in. Mercantile trade debts typically doubled the advance of merchandise or money after five years. Most of these advances were initially made by temple or palace handicraft workshops, or collectors in the palace bureaucracy. Menger’s Austrian theory ignored the fact that weights and measures were developed in the temples and palaces, and that throughout antiquity silver and other metals were produced in standardized purity by temple mints to avoid private-sector fraud. This history has been expurgated, as if enterprise only occurs in the private sector, needing no public role or regulation.

really Great :)

Fletchforfreedom in regards to our conversation earlier about climate change policies who were the economists who designed ''carbon trading'' and do they support the European carbon Price ?

I always thought about this growing up. Why can't just the Government print more money? Is there some kind of special rule that only enable them to print?

Fletchforfreedom what do you you think of the ''free banking'' alternative proposed by Lawrence White and George Selgin ? I believe that they're alternative differs a little from the Rothbardian Austrians

Partly correct. Inflation is the economy's natural reaction to aggregate demand exceeding output capacity. This aggregate demand can have ANY source: deficit spending (financed by "printing" or borrowing), private sector dis-saving, growth of private debt, and/or trade balance shifting towards a surplus.

Amen to this.

lol, I'm glad to see you changed quotes! I guess you have no comment on your erroneous previous quote?

I used to asked this question ever since 2nd grade

I was suspecting the same thing the more I examined his division explanation. What if we just increase the value of the goods and services by bringing more qualified people into the field to balance the increase in the number of dollars? Though, yes I am certainly no expert in economics; so please respond with answer if possible.

I would also add that the declining value of the currency is of least concern and even desirable if moderate. Money should allow communication between buyer and seller and the only thing needed is convertibility just like tickets to the opera sell just fine the night before they become worthless. What concerns me is the rising value of resources due to credit bubbles since land essential to commerce rises in cost . But then I am heavily influence by Georgism and classic economics in general.

That's the point I'm making - you err thinking that the stock of currency is dependent of the stock of commodity - but it isn't. They are absolutely independent. A simple concept reflecting my point: devaluations or revaluations. ...adding or subtracting a "zero" to the amount of currency changes its quantity but the underlying commodity does not change.

1) cont. Since we use money as a reference to price all other goods, however, the effect of a decrease in the "price" of money is a bit obscured. We trade 1 apple = 1 orange. If the supply of apples goes up, the price of apples goes down, so it takes less oranges to buy apples OR the same orange buys more apples. 2 apples = 1 orange. If apples was the money, the price of oranges was A$1 (1 apple dollar) and after the increase in supply of apples, it is now A$2 (2 apple dollars) (more-2)

Well, increased demand increases desire to increase productivity, but you're right: bottlenecks and bubbles are serious issues. Completely agreed! Someone who gets it :) This is why I support Positive Money's & Steve Keen's approach to bank (currency-issuing) reform.

Knowledge is no longer locked away. You can learn almost anything online. How to plumb a house, or program in visual basic. How to prepare artisan foods, plant a garden, or engineer a robot. All that is needed is a will to learn. This development is new in human history, and it is fascinating to me. =) College tuition continues to rise because Gov is subsidizing loans & tuition. They have artificially increased the demand in education, which of course leads to higher prices. ;)

Again, you seem to be making my point for me on the basis of fallacy that did not exist in my initial comment. Intrinsic in the concept of commodity money, as is widely understood, is that the quantity of money remains tied to the amount of the commodity. Once the stability tie is cut, it effectively ceases to be commodity money and becomes fiat money (even if the commodity connection is ostensibly retained which has happened in the wake of state monopolization).

Surely when you talk about this you have to mention quantitative/qualitative easing?

Is the us dollar a voluntary currency>?

You are partially right but mostly wrong. Investment (capital) is a function of interest rates. Government deficient spending has only a slight effect on interest rates. So, overall you don't have very much crowding out, however like I said though super massive government spending will result in very high interest rates causing crowding out to be close to if not 1 for 1. You will have some crowding out when gov deficient spends but not as much to cancel out the growth of gov unless u spend mass

Thanks for pointing that out. However, now, banks do our "money printing" except for the financial (non-real) side which is still the Fed during QE. I would advocate a 3rd party (more independent than Fed) to issue currency. Check out Positive Money's proposal in the UK. Great resource. :)

Can you produce some of these 'alternate currencies' available legally in the US? I mean don't get me wrong..... there probably is 'PLENTY' of them..... I'm just not familiar with any of them.

Sorry, m'friend - somehow missed this one. The economist most responsible for the concept of pollution trading permits is Thomas Crocker (at the time a grad student at the University of Wisconsin). He still supports such measures for easily definable and measurable pollutants but given the wide range of carbon sources (and the history of bureaucratic disaster with similar programs such as in Europe) he is "skeptical" that cap and trade could ever work on such a "grand scale".

The thing about paper money is that it's more efficient to use than metal money. It's easier to produce and create ways to prevent counterfeiters from counterfeiting, it's easier to carry around and a person can carry more, since it's light and a person can fold it up. Paper money is just more efficient in every way.

I thought the same thing at first. I read the description and realized they were NOT supporting it.

Yes actually that was exactly what I was refering to! :)

It is already possible to do electronic transactions in gold over the internet, it works somewhat like PayPal. If gold were widely used as everyday money, it wouldn't be necessary to actually carry it around. One could use digital transfers, and gold substitutes, (ie claim checks for the physical gold) and what ever other kinds of creative ways the market may come up with, to facilitate smooth, liquid transactions. Therefore I think it could be used in everyday transactions easy enough

Victory feels so amazing.