[Script Info]
Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:06.37,0:00:09.42,Default,,0000,0000,0000,,If you tried to pay for something\Nwith a piece of paper,
Dialogue: 0,0:00:09.44,0:00:11.35,Default,,0000,0000,0000,,you might run into some trouble.
Dialogue: 0,0:00:11.37,0:00:15.31,Default,,0000,0000,0000,,Unless, of course, the piece of paper\Nwas a hundred dollar bill.
Dialogue: 0,0:00:15.34,0:00:18.89,Default,,0000,0000,0000,,But what is it that makes that bill\Nso much more interesting and valuable
Dialogue: 0,0:00:18.91,0:00:20.77,Default,,0000,0000,0000,,than other pieces of paper?
Dialogue: 0,0:00:20.79,0:00:23.42,Default,,0000,0000,0000,,After all, there's not much\Nyou can do with it.
Dialogue: 0,0:00:23.44,0:00:25.06,Default,,0000,0000,0000,,You can't eat it.
Dialogue: 0,0:00:25.08,0:00:26.56,Default,,0000,0000,0000,,You can't build things with it.
Dialogue: 0,0:00:26.58,0:00:28.27,Default,,0000,0000,0000,,And burning it is actually illegal.
Dialogue: 0,0:00:29.09,0:00:30.46,Default,,0000,0000,0000,,So what's the big deal?
Dialogue: 0,0:00:30.77,0:00:32.99,Default,,0000,0000,0000,,Of course, you probably know the answer.
Dialogue: 0,0:00:33.02,0:00:35.41,Default,,0000,0000,0000,,A hundred dollar bill\Nis printed by the government
Dialogue: 0,0:00:35.43,0:00:37.46,Default,,0000,0000,0000,,and designated as official currency,
Dialogue: 0,0:00:37.48,0:00:39.51,Default,,0000,0000,0000,,while other pieces of paper are not.
Dialogue: 0,0:00:40.38,0:00:42.33,Default,,0000,0000,0000,,But that's just what makes them legal.
Dialogue: 0,0:00:42.36,0:00:45.26,Default,,0000,0000,0000,,What makes a hundred dollar bill\Nvaluable, on the other hand,
Dialogue: 0,0:00:45.28,0:00:47.55,Default,,0000,0000,0000,,is how many or few of them are around.
Dialogue: 0,0:00:48.03,0:00:51.47,Default,,0000,0000,0000,,Throughout history, most currency,\Nincluding the US dollar,
Dialogue: 0,0:00:51.50,0:00:53.50,Default,,0000,0000,0000,,was linked to valuable commodities
Dialogue: 0,0:00:53.52,0:00:55.35,Default,,0000,0000,0000,,and the amount of it in circulation
Dialogue: 0,0:00:55.38,0:00:58.37,Default,,0000,0000,0000,,depended on a government's gold\Nor silver reserves.
Dialogue: 0,0:00:59.17,0:01:01.93,Default,,0000,0000,0000,,But after the US abolished\Nthis system in 1971,
Dialogue: 0,0:01:01.95,0:01:05.76,Default,,0000,0000,0000,,the dollar became\Nwhat is known as fiat money,
Dialogue: 0,0:01:05.79,0:01:08.20,Default,,0000,0000,0000,,meaning not linked\Nto any external resource
Dialogue: 0,0:01:08.22,0:01:11.16,Default,,0000,0000,0000,,but relying instead solely\Non government policy
Dialogue: 0,0:01:11.18,0:01:13.62,Default,,0000,0000,0000,,to decide how much currency to print.
Dialogue: 0,0:01:13.64,0:01:16.58,Default,,0000,0000,0000,,Which branch of our government\Nsets this policy?
Dialogue: 0,0:01:16.61,0:01:19.57,Default,,0000,0000,0000,,The Executive, the Legislative,\Nor the Judicial?
Dialogue: 0,0:01:19.60,0:01:22.04,Default,,0000,0000,0000,,The surprising answer is:\Nnone of the above!
Dialogue: 0,0:01:22.07,0:01:26.80,Default,,0000,0000,0000,,In fact, monetary policy is set\Nby an independent Federal Reserve System,
Dialogue: 0,0:01:26.82,0:01:28.55,Default,,0000,0000,0000,,or the Fed,
Dialogue: 0,0:01:28.58,0:01:32.60,Default,,0000,0000,0000,,made up of 12 regional banks\Nin major cities around the country.
Dialogue: 0,0:01:32.62,0:01:33.93,Default,,0000,0000,0000,,Its board of governors,
Dialogue: 0,0:01:33.95,0:01:36.98,Default,,0000,0000,0000,,which is appointed by the president\Nand confirmed by the Senate,
Dialogue: 0,0:01:37.00,0:01:38.10,Default,,0000,0000,0000,,reports to Congress,
Dialogue: 0,0:01:38.12,0:01:41.60,Default,,0000,0000,0000,,and all the Fed's profit\Ngoes into the US Treasury.
Dialogue: 0,0:01:41.62,0:01:43.57,Default,,0000,0000,0000,,But to keep the Fed from being influenced
Dialogue: 0,0:01:43.60,0:01:45.76,Default,,0000,0000,0000,,by the day-to-day\Nvicissitudes of politics,
Dialogue: 0,0:01:45.79,0:01:49.24,Default,,0000,0000,0000,,it is not under the direct control\Nof any branch of government.
Dialogue: 0,0:01:49.26,0:01:52.68,Default,,0000,0000,0000,,Why doesn't the Fed just decide\Nto print infinite hundred dollar bills
Dialogue: 0,0:01:52.70,0:01:54.23,Default,,0000,0000,0000,,to make everyone happy and rich?
Dialogue: 0,0:01:54.25,0:01:56.87,Default,,0000,0000,0000,,Well, because then the bills\Nwouldn't be worth anything.
Dialogue: 0,0:01:56.90,0:01:58.100,Default,,0000,0000,0000,,Think about the purpose of currency,
Dialogue: 0,0:01:59.02,0:02:01.83,Default,,0000,0000,0000,,which is to be exchanged\Nfor goods and services.
Dialogue: 0,0:02:01.86,0:02:04.05,Default,,0000,0000,0000,,If the total amount\Nof currency in circulation
Dialogue: 0,0:02:04.07,0:02:08.79,Default,,0000,0000,0000,,increases faster than the total value\Nof goods and services in the economy,
Dialogue: 0,0:02:08.82,0:02:10.68,Default,,0000,0000,0000,,then each individual piece will be able
Dialogue: 0,0:02:10.70,0:02:13.34,Default,,0000,0000,0000,,to buy a smaller portion\Nof those things than before.
Dialogue: 0,0:02:13.37,0:02:15.20,Default,,0000,0000,0000,,This is called inflation.
Dialogue: 0,0:02:15.23,0:02:16.65,Default,,0000,0000,0000,,On the other hand,
Dialogue: 0,0:02:16.68,0:02:18.44,Default,,0000,0000,0000,,if the money supply remains the same,
Dialogue: 0,0:02:18.46,0:02:20.59,Default,,0000,0000,0000,,while more goods\Nand services are produced,
Dialogue: 0,0:02:20.62,0:02:22.56,Default,,0000,0000,0000,,each dollar's value would increase
Dialogue: 0,0:02:22.59,0:02:24.82,Default,,0000,0000,0000,,in a process known as deflation.
Dialogue: 0,0:02:24.84,0:02:26.62,Default,,0000,0000,0000,,So which is worse?
Dialogue: 0,0:02:26.64,0:02:27.82,Default,,0000,0000,0000,,Too much inflation
Dialogue: 0,0:02:27.85,0:02:31.13,Default,,0000,0000,0000,,means that the money in your wallet today\Nwill be worth less tomorrow,
Dialogue: 0,0:02:31.16,0:02:33.16,Default,,0000,0000,0000,,making you want to spend it right away.
Dialogue: 0,0:02:33.18,0:02:37.01,Default,,0000,0000,0000,,While this would stimulate business,\Nit would also encourage overconsumption,
Dialogue: 0,0:02:37.04,0:02:39.88,Default,,0000,0000,0000,,or hoarding commodities,\Nlike food and fuel,
Dialogue: 0,0:02:39.90,0:02:41.62,Default,,0000,0000,0000,,raising their prices
Dialogue: 0,0:02:41.64,0:02:44.48,Default,,0000,0000,0000,,and leading to consumer shortages\Nand even more inflation.
Dialogue: 0,0:02:45.70,0:02:49.10,Default,,0000,0000,0000,,But deflation would make people\Nwant to hold onto their money,
Dialogue: 0,0:02:49.12,0:02:51.01,Default,,0000,0000,0000,,and a decrease in consumer spending
Dialogue: 0,0:02:51.03,0:02:52.57,Default,,0000,0000,0000,,would reduce business profits,
Dialogue: 0,0:02:52.59,0:02:55.93,Default,,0000,0000,0000,,leading to more unemployment\Nand a further decrease in spending,
Dialogue: 0,0:02:55.95,0:02:58.23,Default,,0000,0000,0000,,causing the economy to keep shrinking.
Dialogue: 0,0:02:58.25,0:03:01.89,Default,,0000,0000,0000,,So most economists believe that\Nwhile too much of either is dangerous,
Dialogue: 0,0:03:01.92,0:03:06.81,Default,,0000,0000,0000,,a small, consistent amount of inflation\Nis necessary to encourage economic growth.
Dialogue: 0,0:03:07.79,0:03:10.23,Default,,0000,0000,0000,,The Fed uses vast amounts of economic data
Dialogue: 0,0:03:10.26,0:03:13.60,Default,,0000,0000,0000,,to determine how much currency\Nshould be in circulation,
Dialogue: 0,0:03:13.62,0:03:15.58,Default,,0000,0000,0000,,including previous rates of inflation,
Dialogue: 0,0:03:15.60,0:03:17.88,Default,,0000,0000,0000,,international trends,\Nand the unemployment rate.
Dialogue: 0,0:03:18.74,0:03:20.44,Default,,0000,0000,0000,,Like in the story of Goldilocks,
Dialogue: 0,0:03:20.47,0:03:22.32,Default,,0000,0000,0000,,they need to get the numbers just right
Dialogue: 0,0:03:22.35,0:03:24.92,Default,,0000,0000,0000,,in order to stimulate growth\Nand keep people employed,
Dialogue: 0,0:03:24.94,0:03:27.67,Default,,0000,0000,0000,,without letting inflation\Nreach disruptive levels.
Dialogue: 0,0:03:27.69,0:03:29.04,Default,,0000,0000,0000,,The Fed not only determines
Dialogue: 0,0:03:29.07,0:03:32.22,Default,,0000,0000,0000,,how much that paper\Nin your wallet is worth
Dialogue: 0,0:03:32.24,0:03:34.96,Default,,0000,0000,0000,,but also your chances\Nof getting or keeping the job
Dialogue: 0,0:03:34.99,0:03:36.32,Default,,0000,0000,0000,,where you earn it.