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especially consumers you know they start to see benefits in

source I'd say. I'm going to add some links at the end but

100% efficient stopping of a QE program because essential banks

stop we'll get a completely stale market and very

that read about the constative easing program that happened

Investopedia is an amazing place. Um obviously search this

supply in the market you start to see you know massive shifts

up on YouTube as well just to get a better understanding.

they always want you know money supply to increase because they

even successfully stopped. I don't think there's ever been a

kind of need it to stimulate the economy. If they completely

obviously look back on the previous lessons and another

understood. Please take notes of whatever I'm saying and

the market they get benefits every month and as soon as you

saw in the 2013 a tape a tantrum and then of course

deflationary conditions. Anyways guys I hope you

start to hear that okay you're not going to have as much money

moment. So this just proves the point that the market becomes

earlier before that in 20082009 everything that happened after

guys keep researching more about this particularly what we

back then and understand one thing that QE program never

way too reliant especially in a time like this on the influx of

purchases that's when you actually Start to see DXY you

money provided by the Fed. So of course as you understand

in the in the treasury yield market especially now anyways

increases particularly M2 supply and you realise that

eventually the Fed they didn't really announce anything about

might see a range in market and that's what I'm expecting in

know appreciate in value rather than what we're seeing at the

and you know you you're going to see immediate immediate

from the 2008 crisis and how that continued on because

with this is when an announcement is make is made

chart. If you look back in the 2013 taper tantrum and this is

Treasury yields. Uh example of this is the US 10 ten yield

the beginning but as soon as you start to see interest rate

with all these asset purchases that are happening money supply

hikes which usually happen after the reduction of asset

the reduction of assets until about 2012 and 2013. Now the

going to see a massive crumble after this announcements due to

the first time it was really heard of so this term taper

occur. This means an announcement will be made of

shifts in the markets especially with the US Treasury

the problem with with actually announcing tapering and the

reaction in the in the markets can actually be seen in the US

Now tapering is only expected when the overall economy is

tantrum. Have a look back at the constative easing program

tantrum. Now the reason why central banks don't immediately

reduction of assets is something called a taper

slowing down constative easing pretty much immediately. Um the

announce a shift in policy is because a taper tantrum can

showing substantial progress as we've just gone through. Now

quite a hike from that but of course you know we've had the

information that year on year inflation was recorded at four

now. I believe for the moment they've just released

when the Fed starts to realise okay enough of our constitative

yield markets now if you have a look back on that chart you're

the panic now this is going to be for a short while so you

employment number and of course inflation is increasing right

is just 2% and now the 4% increase it's it's quite it's

pandemic and everything around the world with global macro.

percent. So of course you know what economies usually aim for

course showing higher inflationary numbers that's

easing program we're starting to see you know an improved

start to see consumer price index numbers increasing and of

comes to you know increased money supply with all the

that leads to higher employment rate. The second thing is the

improved employment number and that's the main thing when it

stage of the fundamental course. So as soon as they

increased money supply and all that inflation that's coming

in. Of course they want to see higher GDP and of course that

happening? So first of all the Fed they do want to see an

these are the two main ways that tapering can occur. Now

which types of bonds the the Fed decides to purchase and I

months all the way to 30 years. And of course it depends on

believe they release this information. Um but yeah guys

CPI number. So we've briefly went through this in the first

what are the confirmations of a tapering announcement actually

the maturity of that bond asset. So they range from three

way Is to allow the assets to mature. So as you understand

reduction of expansionary monetary policies as seen as

purchase has an expiration date. So you have to look at

is what we're potentially going to be seeing from an

especially when it comes to the bond market. Every single bond

come into the into place by twenty twenty-two. The second

announcement from the Fed soon and then hopefully that will

Fed uses the word tapering. So that's simply just the

ways. First way is to reduce asset purchases per month which

reduction of asset purchases the term that especially the

know something negative to happen. So in terms of

quantitative easing. Now how can tapering occur? There's two

purchases must start to take place. You can't you simply

can't keep increasing money supply without expecting you

severely leads to the depreciation of the domestic

currency. As a result the Fed have obviously got to act upon

inflation that can lead to an overheated economy. Which

this and you know take action. So a reduction of asset

continues? We're obviously going to be seen out of control

too but these are the main two. Uh so what happens if this

Fed has stepped up its QE program to $40 billion dollars

month in mortgage backed securities and like we

a month in treasury bonds and then $40 billion dollars a

that they look at. Of course there's other types of assets

mentioned before these are the two main two main asset classes

purchases. So let's take a look at the US QE program at the

moment. So particularly since the peak of the pandemic the

in other countries they have to dial back on all these asset

understand that eventually the Fed and the other central banks

can't can't keep up with their QE program. Especially when

and all the money supply in the economy. You've got to

when there's times of higher inflation due to the QE program

So moving on from what we looked at last time with

constated ease and you've got to understand that the economy

going to be looking at reduction of asset purchases.

Yes guys welcome to the next lesson. So in this one we're

Anyways guys take care and I'll see you in the next video.