Explaining currency and economy

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Price of a currency

How do currency values rise and fall? Why would a country want to manipulate the value of its own currency?

The value of money is determined by how much (or how little) of it is in circulation. But who makes that decision, and how does their choice affect the economy at large? Doug Levinson takes a trip into the United States Federal Reserve, examining how the people who work there aim to balance the value of the dollar to prevent inflation or deflation.

Before 1974, U.S. dollars were backed by gold. This meant that the federal government could not print more money than it could redeem for gold. While this constrained the federal government, it also provided citizens with a relatively stable purchasing power for goods and services. Today's paper currency has no intrinsic value. It is not based on the value of gold or anything else. Under a gold standard, inflation was really limited.

 

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Banks


Banks are a riddle wrapped up in an enigma. We all kind of know that they do stuff with money we don’t understand, while the last crisis left a feeling of deep mistrust and confusion. We try to shed a bit of light onto the banking system. Why were banks invented, why did they cause the last crisis and are there alternatives?

 

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How banks makes money ?


Banks make so much money because they can create money, effectively out of nothing, by lending. Every single pound in your bank account was created by a bank, not by your government.

 

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why cannot just print more money ?
A video looking at way you can't simply print money to pay off debt. And what has happened when countries have tried to! And for that matter why a country having debt isn't necessarily a bad thing. The only reason the US has the most debt is because the US dollar is considered the most trust-worthy currency and other countries see the US as a safe place to put their money.

It would be worse it countries started buying debt of other countries and stopped putting into the United States. The debt may be a lot but it's actually not something that's an issue. The US will never 'pay-off' its debt because that's not how it works.

National debt only becomes an issue if GDP isn't growing, which it is. A more accurate way to see when the debt is an issue is the debt-GDP ration. In which the US is fine in that respect. Whereas Greece and Japan have debt-GDP ratios of over 150%, which is bad.
Also, keep in mind that the US owns debt of many other countries. In fact, for every $1 of US debt, the US holds $0.89 of foreign debt.
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If the government can print money, why doesn't it just print money and hand it out? Economics Prof. Antony Davies explains that understanding why money was invented can explain why it is not useful for the government to print money to give away. Increasing the amount of money available for goods and services will only increase prices: this is inflation. If everyone has twice as much money but everything costs twice as much as before, are people better off? Having government print money will not increase wealth.

 

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What is money ?
What is money? We explore how money originates out of a barter system and the five characteristics of money: divisibility, portability, durability, recognizability, and scarcity.

 

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How stock market works ?

 

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What is inflation ?

Competitive Currency Devaluation


Compound Interest Explained

 

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The American Dream - Understanding Money and the Banking System

 

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Intro to Economics: Crash Course Econ