Global Financial Crisis explained in 96 seconds.

A simple explanation of what's wrong with the global economy, and why it's getting worse.

[mitchellwang]

This explains neither the 2008 global financial crisis nor anything at all.

[IronCandyNotes]

Guess something was explained but not the crisis we r in.

[KenWILD]

It's a very basic, concise explanation...what the speaker is telling us is that population growth with no exponential growth in terms of income, small businesses, entrepreneurs, there will consequently be more dire poverty. Major cities will become crime-ridden, the drug trade spreads, and the deviously designed, exploitative pyramid scheme economy will wreak havoc in our lives.

[zelda]

This video handwaves very important things such as how inflation interacts with interest, when governments should run deficits and when they should save, and why governments default. It also ignores the fact that a government's debt is not just to other countries; some countries, like the US, have debt that is mainly owed to both the citizens of the country and the government itself.

[strike-attack]

It's a debt-based currency. Where does the money for interest on the Federal deficits come from? It has to be borrowed into existence. But where does the money for interest for that loan come from? It has to be borrowed into existence as well. The cycle is perpetual, and will always continue to grow in debt until it collapses. "If something can't go up (or down) forever, it won't." People don't realize that the system is working as designed. It is a debt-based fiat currency. We HAVE to keep going further into-debt in order to maintain the status quo. We need to keep the Federal Reserve's monopoly over our fiat currency in order to maintain the wealth disparity. The monetary system is a machine, and it is working well, but working well for who?

[classiclibertarian]

It's a property ownership issue. The investor owns part of the property and, thus, is entitled to its relative growth or loss. A offering a fixed rate would greatly increase potential risk for investors, and otherwise, mitigate returns. That sort of lowered investment could have terrible effects on economic growth.

[worldwide]

@57worldwide Government debt is not meant to be repaid. It's not given like a mortgage, where you must pay $X for Y months. Usually countries already have debts and more debt is added. The country pays a portion of the debt, forever.
The debts are seen by the banks in different ways. To get a mortgage, you save up and then prove you can pay $X p/month. They treat individual loans as if they have been repaid (the bank adds your loan to it's balance, it doesn't subtract the loan).

[truthseeker]

@Guentereconomy We pay interest to private central banks as FED.

"When you or I write a check there must be sufficient funds in out account to cover the check,
but when the Federal Reserve writes a check there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money." Putting it simply, Boston Federal Reserve Bank

[Ackreti]

Recommended inflation rate for developped countries is about 2%. Main reason for this recommendation is that 0 and below inflation would stagnate or even increase the value of money, which is not motivating economy to grow and spend. Too high inflation is deforming market (creditor vs. debtor) and increases risk of price spiral to occur.

[MrLordNacho]

As others have stated in the comments - there is a reason for interest.
Interest, if you simplify, is the price of money. - It's the seller's (lender's) profit.

[NicoCalaRyu]

Great vid. Debt crisis is upon us. Guess the only one who win in this situation are the banks. Keep up the good job, this really help me understand the current economic collapse.

[paulbrye]

@supercool
A and B are countries, not individuals, and the "debt" is aggregate debt, not individual debts. In a nutshell, if individuals owed each other money they could offset their debts, but basically the debts are owed to different individuals or legal entities, so they cannot be offset.

[FreeCommunist]

The fact that the company owes money in the first place not only indicates bad record, but it also indicates bad credit. Owing money to [a person, place, company, industry, &c.] feels like a lump - one that must be removed.

[FreeCommunist]

This is just getting worse and worse. The more we borrow, the worse off we are. No matter how much we pay, we borrow more, and the interest racks up.
Which is why I propose we (in the UK) begin a new, interest-free currency and borrow as less as possible. We can't afford to cut back any more.

[paramonov]

He is right, the video simplified the whole issue. Spain did not borrow from the German state budget but from German banks.

[Kuhchuk]

@Scoinsoffaterocks Because when banking originated, we didn't want to lend people money and just break even (if they pay it back), we wanted more. Problem is, when you're taking loans that are as massive as these are, the amount of interest gets to a point where it's pretty much unpayable, which is what we're seeing now.

[boralapah]

about penalty and inflation it depends on your definition of the term penalty. I was using it in the sense of a negative consequence of an action.

[deltaxcd]

Yes If bank lended 0.9 million of your deposits you cant only withdraw 0.1 million, if you atemt to take more you will have to take debt notes instead of money.

However typically, bank will just borrow money from central bank which will create money at that time as bail out procedure. If bailout is denied deposits are partially lost or at least delayed.

[diegomorales]

Crisis explained in 5 seconds: when you abandon gold/silver & create money out of nothing, it leads to misery.

[sabin]

it's not difficult to do a bit of research, wikipedia tends to be a good place to start and get an idea of what things are, and then consult a more technical source.
from wikipedia:
"Civil law (or civilian law) is a legal system originating in Western Europe, intellectualized within the framework of late Roman law, and whose most prevalent feature is that its core principles are codified into a referable system which serves as the primary source of law. "
(continues)