Money Supply and Demand Impacting Interest Rates

Learn more: Examples showing how various factors can affect interest rates.

By | 2013-08-27T07:18:55+00:00 August 27th, 2013|Mortgages Home Loans Interest Rate|24 Comments

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  1. oqendro August 27, 2013 at 6:47 PM - Reply

    yes to an extent. they would be forced to raise the interest rate if inflation increases

  2. xAL3Xx August 27, 2013 at 6:30 PM - Reply


  3. swedishorient August 27, 2013 at 6:00 PM - Reply

    is there anything this guy doesn’t know??

  4. JasonCtutorials August 27, 2013 at 5:54 PM - Reply

    whenever the government interferes it just effs up the economy!

  5. spirituelconnexion August 27, 2013 at 5:43 PM - Reply

    Greed ??

  6. G0TSt33Zy August 27, 2013 at 4:48 PM - Reply

    macro at its best. nice ass video.

  7. deerslayersite August 27, 2013 at 4:33 PM - Reply

    I like his site, and I respect what he says but he is not an expert on everything (nobody can be). Money and finance are FULL of religion and dogma. What you believe changes the outcome AND changes your behavior.

    In a way it’s similar to the “force” in starwars. There is the Jedi and the Sith. BOTH know a great deal about the force and BOTH know the strength and weakness of either side. Which is the “right” one? “it depends on your point of view” says obi-wan

  8. PresAndrewJackson August 27, 2013 at 3:48 PM - Reply

    “The price of money”

    This is where your alarm should be going off. Money is a simple trading commodity intended to make trade a lot more easier. It is supposed to serve us, not cost us.

  9. KaninoWorldIsThis August 27, 2013 at 3:13 PM - Reply

    if consumer savings goes down, why would the demand curve shift up?

  10. ITogoPogoB August 27, 2013 at 2:51 PM - Reply

    When consumers save less, it’s usually for the intention of using that would-have-been-saved money to buy goods. Or, instead of saving money, they decide to spend it on consumer goods, shifting the demand curve outwards

  11. klinckphilip August 27, 2013 at 2:15 PM - Reply

    But, when all of those happen at one time you have a problem. Currently our Government has a huge demand for money because we are running huge deficits. But, interest rates are not going up. The FED has pushed them down to 0-0.25%. And the consumer savings rate is very low. This creates the perfect storm for future inflation because rates are not allowed to reflect what is actually happening. So there is just a glut of money being created. And its is cheap now but its not going to be later.

  12. Jared Wright August 27, 2013 at 1:53 PM - Reply

    Zeitgeist Moving Forward

  13. lolerage August 27, 2013 at 12:59 PM - Reply


  14. quinnhk August 27, 2013 at 12:13 PM - Reply

    Sure, until you introduce a cost to borrowing. If you don’t want to do that, then there is less incentive to lend, and less growth. The trade-off is simple…

  15. Brendan Smith August 27, 2013 at 11:41 AM - Reply

    That’s where you’re wrong. If an economy is burdened with national debt and compounded interest, taxes are going to exponentially increase, leaving less spending money for the taxpayer. If you want to keep interest payments low, the debt has to be low, ie you need to increase productivity and trade and increase your real GDP. But you’re going to constantly be borrowing more money (with interest) to keep up with the demand for it; see the problem?

  16. Brendan Smith August 27, 2013 at 11:01 AM - Reply

    I understand where you’re coming from, but I don’t think you’re quite getting what PresAndrewJackson is saying. He’s simply stating from a macro level, if the only money entering the system is debt-based (ie interest bearing), assuming there is no foreign trade, any money in circulation is simply the principal of a loan. So how do you pay interest? That’s the problem with the federal reserve system. What PAJ is calling for is debt-free, government printed money, not debt free banking.

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  18. Pablo Jarvis August 27, 2013 at 9:58 AM - Reply


    You could argue that if consumers save less, then they will borrow less. So demand will go up?

    How does that make sense, soz 😛

  19. jewishunited August 27, 2013 at 9:15 AM - Reply

    Thank you very much, explains really clearly!

  20. StudentKats August 27, 2013 at 9:02 AM - Reply

    Consumer savings goes less when there is inflation. In such case well to do consumers will save less while those on the borderline will have to borrow now to meet their needs. So we will have an aggregate effect of middle class saving less and poor borrowing more… HTH

  21. Todd Aillon August 27, 2013 at 8:59 AM - Reply

    whats a central brank? jk. thanks for the vid. it helped 😉

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  23. tareek72 August 27, 2013 at 8:30 AM - Reply

    i think “less” should have been “more”.. they save less cos they need to spend it, and MORE borrowing could help with that

  24. eggjm August 27, 2013 at 7:38 AM - Reply

    I’m not sure but I think that if consumers save less then they’ll have a higher disposable income. This means they wouldn’t need to borrow as much to buy things but would increase demand. I think this would only work short term though.

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