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then of course inflation to grow a bit as well. In case

talk about it so much in my fundamental breakdowns but yeah

that constative easing an example is the US and the Fed

always had a lot of questions about this especially since I

about bonds and everything but you can actually purchase

hopefully we can be seeing that in the next few months and then

end of August in 2021, so quite a few are about to pull back on

it helped and gave you a better understanding because I've

of course from that we'll be seeing DXY and USD increasing

economy but yeah guys this is it for constative easing I hope

in value but yeah let's just see what happens with the

different type of QE program some of them right now it's the

apart from what I've said of course every economy has a

stocks. Uh so as you we're going to get into a lesson just

private debt and bonds from the stocks so that's something that

you're having the question of why I'm saying you want

we're looking to further on. Eventually the intended

it aimed to curb deflation and stimulate their economy after

the financial crisis in Asia in nineteen ninety-seven. So the

the first to implement quantitative ease in in which

these are all the things that you've got to consider but guys

Another example the Japanese yen. So the Bank of Japan was

inflation there's more consumer spending more economic activity

Bank of Japan bought bonds and then private debt as and

constative easing it's one of the most important things

especially in recent times that you're going to be seeing so

definitely do more research on it there's not much else to it

inflation to grow think about the economic cycle with

way constant easing did not flow well into the economy

with GDP falling 20 percent a year over the eight years of

the program. So instead of actually going in a positive

wasn't distributed well and instead we saw GDP actually

fall rather than what we intended for that to grow and

economic stimulation did not go through well into the economy

a crazy amount. Excess reserves increased to 2. 7 trillion

arise from QE if not received well by the general economy and

economy has recovered but at what cost? At what cost has it

which is far more than you know the US economy has ever seen.

recovered? You know we've increased money money supply to

excess reserves to two point seven trillion which is far

you're actually not seeing that's that stimulation within

population is the example of the Fed's QE program between

more than than expected. Now you can still say of course the

2008 to 2014, the increased asset purchases of bonds,

easing as a form of monetary policy how they use it and the

train is all interlinked so we need to look at constative

course CPI and PPI levels. Now if you remember back to the

mortgage backed securities and other assets. This grew the

effects it has now an example of problems of QE let's look at

purchases and of course money supply might increase but

more expensive increasing the cost of production and of

first section of fundamentals you know we're always referring

so not a crazy influx of money unlike printed money where that

it can devalue the currency which make which makes imports

you want. That intended you know consumer spending. Instead

USD for the first example so an example of problems that can

back to different areas of the economy as I said the economics

the economy. You're not seeing that intended inflation that

effects of QE potentially the QE program may not work itself

well recovered economy with increase in economic stimulus.

effects of QE. If implemented successfully it can lead to a

money goes straight into the economy. Now the negative

going to get adverse effects. Now let's look at the positive

effectively into the economy. So you might see a lot of asset

bank acting as if it's a third party or an intermediary.

Rather than all of that money directly into the hands of the

of producing high levels of inflation. Because it uses the

Now of course this is in theory. QE is a gradual process

easing is a form of money printing but carries less risk

consumers. Now if we were just simply printing money you're

the Bank of Japan. So many people argue that constative

come about in the past 20 years I believe ah particularly by

a long time you know ah that's what central banks would be

doing in the past. Constative easing is ah something that's

invest printing money now print money was of course around for

securities so let's just compare quantitative ease

you're approaching 0% and you're even at 0% where you've

Remember how we said the actually the main way of of

got nowhere to go so what's the next option it's the purchasing

lowering interest rates is not effective anymore since they

of assets purchasing of bonds or these mortgage backed

they will reduce interest rates to increase economic activity

economic growth. If they receive that inflation without

borrowing and spending but it gets to a point when when

staglation. So that means when an increase of inflation but

for. Now why do we actually use it? Typically it's because

not the intended economic growth that they were looking

and now inflation is of course expected but the central banks

are not since they are near 0% so they need another option. If

eventually when the economy is trying to recover of course

having a monetary policy is by controlling interest rates

only want that inflation to come at the cost of an intended

we quickly go back to the monetary policies. Here we go.

it's linked to the mortgage market. So what's the goal of

backed security. So it's a security in a similar way but

you've got a different type of security which is a mortgage

supply. As a result that stimulates economic activity

constitute? The first one of course is to increase money

actually seeing the economic growth that's also known as

and eventually they have to pay back to the investor. And

the government would pay from somebody and then it matures

purchases longer term assets such as bonds or mortgage

unconventional monetary policy in which a central bank

about it because it's it's so key to every single economy at

a lot of economies around the world have adapted this

the moment. So quant state of ease is a form of

backed securities. So before we get into the rest the two

strategy of constant easing and of course we need to understand

what it means, how we do it, and then of course how we go

been explaining it's it's like a type of loan that you know

types. You've got bonds which of course we know is as I've

this is a term that I always use because it's been it's been

so instrumental in the economy at the moment you know

recovering from the pandemic recovering from COVID a lot of

we're going to be looking at quantitative easing or also

following me in my telegram for a while you'll understand that

Yes hello everyone welcome to the next video so in this one

known as QE now this is a term if you don't have been

guys that's it I'll see you in the next video.