| Title | : | Velocity of money rather than quantity driving prices | Finance u0026 Capital Markets | Khan Academy |
| Lasting | : | 3.31 |
| Date of publication | : | |
| Views | : | 115 rb |
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Once this happens you can raise the volicta of money world wide Comment from : frankie patron |
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So the banking puts in a bank Comment from : frankie patron |
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Leverage Comment from : frankie patron |
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Sal, I don't think you demonstrated money velocity drives up price Comment from : crazieeez |
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Khan is just the best, whatever you wanna understand, Sal got your back covered Comment from : AtriaGotler |
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Very inappropriate example Inflation would not occur with sound money, it is merely a byproduct of elastic money supply (fiat currency) Comment from : Jolly Roger |
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Keynesian nonsense Comment from : Boomer Plays Games |
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same as gdp increase drive price maybe Comment from : Aman Rajput |
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I rarely thumb down a video, but this one really needs improvement Comment from : Shiny Rain |
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Doesn't this go against your hyperinflation video's? Comment from : Sam Steers |
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Wha?brThat really wasn’t well thought out or presented clearly Comment from : johnfehringer |
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Why do they need the gold coins? Comment from : J Wethington |
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Rare swing and a miss for Sal Comment from : Silver Valley A-Frame |
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I have a question regarding the theory explained in this video and XRP , the coin created by ripple labs : ripplecom/xrp/ brLet's assume that XRP will be globaly used , this will lead to an increase in the velocity of the transactions since using XRP it only take 4 seconds to send money across the globe with a very lowe fee brLet's say i have to send 1000 dollars from italy to USA using banks payments I'd have to pay a fee of 40 dollars and iìd have to wait for 3-5 business daysbrUsing XRP iìd only have to pay 50 cents and iìd only have to wait 4 seconds (I've just made up the numbers but the point is that using XRP the fees will be much lower and the time will also greatly decrease)brDo you think that these effects of using XRP ( which are undoubtedly very good) may provoke a high deflation ? Comment from : Giovanni Minto |
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"There is a common misconception out there that price levels are dictated purely by the [money supply]" No that's not a common misconception at all; Demand is required Everyone knows that, and it invalidates your entire argument You are simply making an observation that increased general demand for stuff (thus creating a general increase in commercial transaction velocity) seems to correlate with higher prices Duh This is just sophistry to support the leftist-socialist-money-printing-as-a-hidden-tax-policy, which requires us to also believe that increasing prices is a good thing, and saving money for worth-while projects (another word for JOBS) (and even when there is otherwise nothing good to spend your money on) is a bad thing Comment from : Govt Created Covid (duh) |
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Also in real life they would also trade IOUs of gold coins with each other, further inflating the price Comment from : The Peter Dislike Show |
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Prices go up because of quantitative easing and ever decreasing supply of resources Comment from : myoplex1 |
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this kind of explains why we're in the recession Comment from : jasonc_tutorials |
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you bring up really good points, but this was just a demonstration of what the velocity of money is In the real world there are many variables, but this was just a very basic concept he was trying to convey Comment from : Chuck Norris |
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3 gold coins for the same building he paid 2 prior? 3 gold coins for food instead of 2 because i'm busier? Competition never comes into play nor does the invisible hand Price just goes up for whatever - "just because" LOL crock economics
56 people with their thumbs up their ass are now dumber thanks to you Comment from : Rick Sixx |
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Velocity of money is a myth and does not work like this What Khan is missing is that people don't just bury their gold in the ground, they invest it and look for a return Even if they put their stored money in a bank, they are looking for a return on their savings through a money market account and in turn that money market account buys Treasuries Prices should actually go down in a good economy because the supply of products grows The reason prices rise is because the Fed prints too much Comment from : John Galt |
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@billychen13 Yes, but not always Khan has a video explaining how it can cause deflation as well Comment from : Andrew Szlamp |
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@scwallac To expand your thought, new money is "created" by people taking credit but at the same time other people are paying down their debts and that money is "destroyed" However when the interest rate is artifically low, more people take on debt than those paying off due to the cheap money and as a result u get the asset bubbles like the dot com and housing bubble Right now its the government taking on huge debt using money created by the fed out of thin air hence the inflation Comment from : Billy Chen |
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@ManlySlut so basically u agree with me ie increase in money supply causes higher prices Comment from : Billy Chen |
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@billychen13 To expand your thoughtWhat is the farmer and builder can suddely go out and get credit very easily at very low rates Now the farmer can pay more money to the builder Credit expands the money supply, and prices go up Comment from : scwallac |
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@phoebus1011 Disagree Stock prices go up due to buyer expectations of future earnings or future value of that stock Prices could also go up if the company executed a stock buy-back (which would be analogous to contracting the money supply) Velcotiy of money not related Not sure why you would draw the conclusion Comment from : scwallac |
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@scwallac Sal makes sense Take for example stock prices Stock price goes up only when there is such a high velocity in money Comment from : phoebus1011 |
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Actually, Sal, what you've demonstrated is that prices are driven by supply/demand and productivity The builder had a shortage of labor supply, and so prices were driven up Or, maybe the builder just built houses too slowly, ie he had low productivity, thereby driving up the prices
Prices are driven by supply, demand, productivity and money supply I don't see how your video demonstrates velocity of money as a price driver Comment from : scwallac |
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@billychen13 The main factor here is the demand:supply ratio
The high price came from the sudden increase in demand that came from the farmer's surplus irrespective of supply
It's the same scenario as inflation The more money, the more transfers aka higher velocity of money, therefore prices go up due to overconfidence in supply Comment from : Andrew Szlamp |
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does velocity of money drives up price, yes, does quantity of money drive up prices? duhhhh? what if these two people (farmer and builder) get 2000 coins each? Comment from : Billy Chen |
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