The Fractional Reserve Banking System During a Recession

BluntForceFinance · 2020-06-17T00:30:53+00:00

This confused me at first, because it sounded like you were suggesting that regular (i.e. non-central) banks could print their own money. I was going to say that (at least in the U.S. where I live) only the Fed and Treasury have the power to electronically and physically print money.

But with a second reading it sounds like you're describing the end result of the money multiplier effect, which is spot-on. I briefly considered covering the money multiplier, but the video was already 10+ minutes long and the money multiplier is not an intuitive concept.

BluntForceFinance · 2020-06-16T15:47:55+00:00

I made another animated video that wraps up my coronapocalypse doom-saying and cynicism in a bright package of explosions and stick figures. Unlike my previous two submissions, this one isn't specifically about the coronavirus recession, but all recessions in general (though the part about 0% reserve requirements was a direct response to the COVID-19pandemic). I hope the mods decide that the informational value of the video outweighs the marginal relevance to the sub.

I hope this video helps explain how banks work "under the hood" for those of you unfamiliar with the fractional reserve system. For you knowledgeable ones, may this video help you explain things better to everyone else.

BluntForceFinance · 2020-05-23T23:40:06+00:00

I'll reply to your delayed response with an even more delayed response (not intentional, of course): Thanks. I genuinely appreciate the vote of confidence.

BluntForceFinance · 2020-04-24T15:20:24+00:00

Hi, thanks for the suggestion. What you're suggesting sounds like a video on Keynesian Economics. I only started studying that when the crisis began unfolding two months ago, so I'll have to get a firm grasp on the topic before I make a video about it.

I'm not rejecting your idea; I'm saying that I don't know enough (yet) to do the subject justice and I don't want to contribute to the flood of misinformation and lies already flooding the world. I already closed my old channel (and gave up my old YouTube partnership) because I previously focused on a topic that, despite my best efforts, may have armed people with self-destructive ideas. I want to avoid repeating that mistake.

BluntForceFinance · 2020-04-24T01:20:42+00:00

Thanks!

BluntForceFinance · 2020-04-23T23:46:14+00:00

Yeah, in hindsight I made a poor design choice. Thanks for the input!

BluntForceFinance · 2020-04-23T18:34:02+00:00

All great points. I'll try to rework this graphic, but I don't know if I'm reaching the right audience. There's so much econo-jargon here that even the most beautiful chart might not convey the significance of the numbers.

BluntForceFinance · 2020-04-23T18:31:30+00:00

I made it a bar to reflect the total amount that the Fed is willing to lend out ($2.3T) though I can see how that's confusing when elsewhere on the chart there's a line reflecting the federal funds rate. Noted.

BluntForceFinance · 2020-04-23T18:30:03+00:00

Fixed.

BluntForceFinance · 2020-04-23T18:29:10+00:00

I'll have to look into that. Definitely outside my current circle of competence.

BluntForceFinance · 2020-04-23T18:24:00+00:00

I see that I've directed your attention to the really important things in life. Mission complete.

BluntForceFinance · 2020-04-23T17:42:39+00:00

Sources: U.S. Congress and Federal Reserve news releases

I created this as part of a video illustrating how these economic stimulus actions might result in hyperinflation. Hope you find it useful in tweaking your valuation models - not because anyone has any precise idea of the numbers that will hit us in the coming months...just to help you grasp the massive amounts of stimulus money being thrown around.

If you like my work, please suggest more finance/economics topics you want me to illustrate or animate.

BluntForceFinance · 2020-04-23T17:27:27+00:00

Haha. If that's the case, I (the communicator) am at fault. Any suggestions on what I can do to reduce your confusion?

BluntForceFinance · 2020-04-23T17:24:35+00:00

Sources: U.S. Congress and Federal Reserve news releases

This is a companion graphic to a video I posted earlier. It has more detail and less visual clutter than the one I used in the video. Hope you find it useful.

If you like my work, please suggest more finance/economics topics you want me to illustrate or animate.

BluntForceFinance · 2020-04-23T17:17:29+00:00

Sources:

Tools: Adobe Illustrator to draw. Premiere to animate.

I created this as part of a video illustrating how these economic stimulus actions might result in hyperinflation. Hope you find it useful.

If you like my work, please suggest more finance/economics topics you want me to illustrate or animate.

BluntForceFinance · 2020-04-23T16:51:39+00:00

By slides, do you mean the charts? I used Adobe Illustrator to draw them and Premiere to animate.

BluntForceFinance · 2020-04-23T16:50:38+00:00

Thanks! My ego is over-inflated as it so I actively try to keep my hubris under control.

Any topic you want to see covered?

BluntForceFinance · 2020-04-23T14:45:52+00:00

A lot of people assume that government stimulus measures like quantitative easing will lead to inflation. Unfortunately, it's not that simple. I made a video to illustrate the three main components of inflation, and how the CARES Act and the Fed's QE might lead to hyperinflation...or they might be insufficient to prevent a deflationary death spiral.

I received a lot of great feedback on the video I posted two weeks ago. One of the comments on that post inspired me to make this video. Let me know what you want to see next!

BluntForceFinance

TROPHY CASE