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What gives a dollar bill its value? - Doug Levinson

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View full lesson: http://ed.ted.com/lessons/what-gives-a-dollar-bill-its-value-doug-levinson The value of money is determined by how much (or how little) of it is in circulation. But who makes that decision, and how does their choice affect the economy at large? Doug Levinson takes a trip into the United States Federal Reserve, examining how the people who work there aim to balance the value of the dollar to prevent inflation or deflation. Lesson by Doug Levinson, animation by Qa'ed Mai.
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Text Comments (2192)
Game Hacker (4 days ago)
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khor kienjoo (8 days ago)
1:43 Are those lightsabers?
Million Dollar Rabies (11 days ago)
Currency has value because of both taxes and the benefits of paying taxes. If you pay U.S. taxes, you can fluidly move around and do business in The United States without risking government wrath. That is a very valuable state of being to be in, because being able to freely move and acquire large values of goods and services in The United States can be a very pleasant experience.
cd5ssmffan (10 days ago)
no
chun yan gong (16 days ago)
The money linked to gold is called the gold standard.
Malacki 655 (17 days ago)
The US dollar is counterfeit,the federal reserve create money out of thin air and put interest on it then loan it to the government,if you and i did that we would be arrested for fraud but somehow the fed can get away with it.
Fabián Garavito (18 days ago)
¿What gives gold its value?
adwait naravane (18 days ago)
Burning it isn't illegal
BORATOBIWAN (20 days ago)
Get that us flag off the FED if you know anything you would know it does not belong there
S QQ (21 days ago)
Dollar bills are paper
S QQ (21 days ago)
Sorry is plastic
M Tahir (21 days ago)
bitcoin!!!!
Wise Ekrem Selim (25 days ago)
Hahahahah
Jordan Bakke (27 days ago)
A dollar bill has value because everyone believes that everyone else believes that it has value. You're willing to work for dollars because you believe that the next person you want to buy food from will value your dollars. They're willing to give you their food for your dollars because they believe the next employee they want to hire will value their dollars. Etc.
SAVAGE308SNIPER (28 days ago)
My balls itch.
최유경 (30 days ago)
Through this video, I learned that the value of money plays an important role in the economy. I also learned about the correlation between the value of money and inflation and how inflation and deflation would affect the economy. I thought inflation was not good at all, but I found that a small, consistent amount of inflation is necessary to encourage economic growth.
Bar Aviv (1 month ago)
Peter Schiff was right again!
PREMCHAND BEHERA (1 month ago)
Money is valuable not only because of its acceptance as a valuable but also due to clear legislation
john doe media (1 month ago)
I thought us cash dollar was worthless because a piece of paper was given to someone for his work that’s like the fed just printing 10 dollars here now pay me this plus interest
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SegaMega (1 month ago)
this is nice https://currencyconverter.world/
Art TV (1 month ago)
This video is bull$hit. The government does not print money because the Fed is a privately owned banking cartel no more federal than Federal Express.
Dirty Wash (1 month ago)
The whole video=money is worthless
DDERDEJAN (1 month ago)
How to Create Local Currency: https://drive.google.com/file/d/1kXWDjKJ8Bjd9Fa3UAgmGfCRAqgSKxaV0/view?usp=sharing
Henry Gustav (2 months ago)
Taxes give dollar bill its value.
Henry Gustav (10 days ago)
its what drives the demand for it.
cd5ssmffan (10 days ago)
no
Observer (2 months ago)
1:30 so banks control our money 😒 Plus how do we know the board of governors aren’t also bankers...
Kagaz Ki (2 months ago)
I'm so *FED* up with this.
B.J. Hubbard (2 months ago)
3:24 lolol
Falling Crane (2 months ago)
_where is trumpet man_
on eman (2 months ago)
This vid is bullocks! This vid , however, will enlighten https://youtu.be/CyWH8NJGRsA
Napp Tyme News (3 months ago)
The Government doesn’t print the dollar bill, they borrow it from the Crooks who Print it. They call themselves the “Federal Reserves” ... they are not Federal and they have no Reserves for the people!
Zes (3 months ago)
wrong, idts. no such thing as value about it.
Zlatan Ibrahimovic (3 months ago)
WOOOOOOOOOOAAAHHHHH just read this. it's debt that gives money its value because when money is created so is an equal amount of debt to the persons name, so the person is obligated to work after they spend that money because they need that money back to pay the debt so it makes that money a valuable thing because people need it and will be punished by the law if they don't get it back in time. money is about slavery
Foxwood Robins (3 months ago)
Not until we run out of food will we realise that we can't eat money.
antwalk 777 (3 months ago)
We are the value it is obvious in order to sell someone has to at the same time be buying. This is why I sell digital products now debtfree trying not to be lazy.
candy girlll (3 months ago)
In other words, without poor people the country would collapse. Problem solved
Louie Maranan (4 months ago)
who realizes at 0:40 the identification number is the first 12 digits of pi PS: the last number, which is 9 isn't the 13th digit of pi so i'm not counting it as the 13th
00rphb (4 months ago)
No the value of the dollar is not dependent on how many of them there is around. It is all about faith, or rather confidence. See fiat currencies are a so called *confidence scheme* it tricks people into accepting things of no value for lots of value. And it is a long scheme, because it started with real money, gold and silver, and then these were gradually removed in favour of the pure ponzi that is fiat.
Sharmella Krishnasamy (4 months ago)
Once i was told, it depends on how much gold the reserve bank owns. That's how british pounds value is always high.
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xxSourWingxx (4 months ago)
if every grows their own food, money would be alot less valuable.
Stick Fighter (4 months ago)
100💵
aswini dutt (4 months ago)
Unbelievably simple explanation. Just awestruck ✌️☺️
panser björn (4 months ago)
So is that why the US needs to keep going to war with countries that questions the dollar's value? If people decided not to care about American goods and services and $, but instead chose to focus on what they deem valuable, why then the dollar wouldn't be worth the paper its printed on would it. Interesting....
PunkCabaretDoll (4 months ago)
Printed by the government??? Uh, wrong.
cd5ssmffan (10 days ago)
+Doug Levinson it's printed mostly by the fed which is a private corporation
Doug Levinson (4 months ago)
Respectfully, you ain't just wrong, you're LOUD wrong. https://en.wikipedia.org/wiki/Bureau_of_Engraving_and_Printing
TESTube (4 months ago)
The power of the dollar is due to US laws promoting freedom and liberty, and the right to not to be robbed by anyone. This is why russian money worth nothing
Canaan Noah (4 months ago)
You all know that the petro dollar is about to crash , there is a dozen or more countries right now that stopped using the petro dollar in oil deals or other forms of trade . China , Russia , Iran , Syria , Venezuela , Brazil , Turkey , North Korea , India agreed to pay for Iranian oil in Iranian currency . etc . The trend to walk away from the petro dollar is unstoppable , therefore , a crash of the us economy is unavoidable .
cd5ssmffan (10 days ago)
what of ukraine? not entirely sure though
TerminallyUnique95 (4 months ago)
Article 1 Section 10 of The Constitution was written because the founders knew that all paper money eventually becomes worthless. The Chinese first used paper currency in the Tang Dynasty and ran into hyperinflation. The Constitution is a guidebook we can't afford to ignore.
SXHMXT (4 months ago)
buyuk oyunu gorduk yiğen
Dontell Benjamin (4 months ago)
Money has value because humans give it value.
Gilang Pangestu (4 months ago)
I hate Fiat Money Gold is the best currency They will always be precious even the government fall out
Bharath Reddy (5 months ago)
I hate this video! It conflates fiat currency with actual money.
Slap that douchebag (5 months ago)
The moment countries stop buying oil using dollar. Dollar = paper
John Burns (5 months ago)
The Fed is a *private* bank.
Hector Riquelme (5 months ago)
Its military capabilities.
Rani Hasan (5 months ago)
My head hurts. Good vid tho.
Askhimto Hat (5 months ago)
So the poor country gets poorer....... A masterminds US
Christopher Boos (5 months ago)
A.) The American Government does not print money, That would be the banks, The American Government only BORROWS money from banks, B.) The Gold Standard wasn't used in the 40s,50s,and 60s,we stopped using it around the great depression
Patrick Seabird (5 months ago)
Not all of the FED's profits are going to the government. 6% are going to the member banks and therefore to private banks!
Economic Principles (5 months ago)
Money is a good for trade primarily. Its value derives from the expectation that it can be exchanged for other goods/services. Therefore it also needs to be a store of value. https://youtu.be/35KwmIq-q8g
Javier L (5 months ago)
I dind't understand deflation. It the dollar is worthier, then you are supposed to buy more things for the same amount of money. So you don't save the money as the video says.
JT Phillips (5 months ago)
I’ve always had this question
Necro Boomer (5 months ago)
Do you know how the “paper” bill is more special than other paper, it isn’t paper
Dylan Wedel (5 months ago)
Why don’t we just print a bunch of money and make everyone rich?!
Greatest Story Ever Told (5 months ago)
no need for paper money or commodities. ENERGY matters and ENERGY we all consume. Just convert solar/wind to energy and let watts be the new currency
Clone TV (6 months ago)
BTC and LTC to 20x + gain this year...math says https://youtu.be/7R4HysALXhY
Soumya Dahal (6 months ago)
so...this is only in USA. Right?
Vasting (13 days ago)
no just using US as an example. but most countries don't use gold anymore.
George's Studio (6 months ago)
0:32 i died ! need more of those visual puns! hahaha
Hoàng Điệp Lựu (6 months ago)
The thing that makes money value is that we can exchange money for what we want.
Random gooy (6 months ago)
Our faith in the government
don Fierro (6 months ago)
What gives a dollar bill its value quick anwser nothing
Tim Johnson (6 months ago)
A $100 dollar bill is NOT printed by the government........
Gen Mystical (6 months ago)
OPEC petrol gives these papers its value
Fawad Nabi (6 months ago)
War and use of terror makes the money value grow
Bojan Subasic (6 months ago)
Great explanation
matsterness (6 months ago)
All i'm saying after watching this is - Bitcoin.
rodolf seobal (6 months ago)
The reason why countries can't simply print all the money it needs is simple: if there's a lot of something, its value goes down. The amount of money in circulation goes up, but the total value of goods and services remains the same, so your money buys less. Sure, you can have a billion dollars in your wallet, but it doesn't matter if a burger costs a 100 million dollars to buy.
Platypus Paws (6 months ago)
This video left out that it is also TAX that makes a currency valuable. Any currency the Govt creates has value if the Govt says "you must pay your tax in this currency". That means it must be in demand. Tax side policy is called "Fiscal". IMO, Deficit Owls is a good channel, imo, for understanding State monetary operations. It is an MMT channel, which is about understanding macro Economics by trying to understanding the facts of how State-based accounting Operations of a country like the US actually woke. This is a different approach to simply understanding Economics theories, which according to MMT often applied to the pre-1971 Gold Standard, not to the State-based Operations of Fiat Currency. Though, it is controversial for those who insist on the assumption that Fiat Currency must work like a Gold Standard currency, and that the Govt (which issues/creates currency - a "Currency ISSUER"), must & should work the same as a household or business (a Currency USER). It is claims are usually heavily misrepresented by those who argue against it, but not always. Just most of the time, I find.
Michael O'Leary (6 months ago)
Your stupidity is the answer
Halo Sedrick (7 months ago)
The Fed is a corrupt entity controlled by private bankers positioned in order for the majority to become poorer and rich becomes richer by printing money out of no where and circulating that money in the economy, where people like you and me work our asses off for something that was printed in seconds
Hyoroemon Meto (7 months ago)
when gold is high USA: use the gold standard when gold is low USA: we are not following anything that make our dollar weak
CodeWizart LLc (7 months ago)
What a rubbish. The government does not print the money, The Federal Reserve Bank does, which is just as Federal as Federal Express. The government borrows the money.
TheaDragonSpirit (7 months ago)
Fiat money = Bitcoin. In the sense that people decide how much there is. When currency isn't linked in to the overall value of everything, how much things cost is pretty much determined by people. I think long term money will be pointless once people find ways to make products more available and use better strategies to develop products. Based on this video, what I heard is they want people to have just enough to live, but not so much that they stop working. Sounds a little like slavery to me. I get it people need to do things to keep things moving forward and to give some people a reason to keep helping out. But unless we aim to get to a place where a system like this isn't needed, then I think a whole new system of distribution is needed. What I mean is we should be aiming to create a world where people don't have to work so hard or even at all and the world keeps moving forward just fine. So more technology to replace simple jobs, and more giving goods to the poor and needy. Pay people for the data you collect from data mining, and observing the patterns people have, as in if someone plays a game or watches a TV show, or what ever they're taking time to give feed back and spread information about this, they are doing advertising to an extent. So people should get something back from simply taking part in society and respecting society, rather than just been expected to respect society. So basically people get products and goods or right now an universal income for being a good sport as it where, encouragement to want to help society, not just expecting people to do this.
Chris Baker (7 months ago)
If you had 2% deflation a year we would be a lot better off.
FireBow (7 months ago)
Chris Baker then how is deflation beneficial?
Chris Baker (7 months ago)
FireBow Technology gets cheaper and cheaper every year. The result is more and more people can afford to buy phones, computers, and technology has a huge value.
FireBow (7 months ago)
Chris Baker not true. It would make you want to hold not your money because you know you can buy more with it next year. Inflation, however makes you want to spend your money now rather than next year when products become more expensive. The economy relies on money being spent which can be influenced by the government by raising or decreasing interest and rent on your bank account. You always need to keep money rolling and a slight inflation stimulates that.
Mindaugas Kaulius (7 months ago)
And its not the government that prints money, it's central banks who are privately owned...
Leonardo Vieira (7 months ago)
BitcoinBitcoinBitcoinBitcoin-raiblocksraiblocksraiblocksraiblocks no comments just wait for the future
joe mason (7 months ago)
The commodity is crude oil and also citizen bonds. Militarily 3rd world countries are forced to buy oil in dollars, hence all the wars in oil rich countries. As well as us citizenship used as collateral bonds to the banks.
TheMedia-Hacker (7 months ago)
The US Dollar Is Backed by BLOOD AND 3000 ICBM's
HighMojo (7 months ago)
The title of this video is completely misleading as it doesn't bother to answer the question that it sets forth. For those who want to know the real and simple answer, here it is: The US dollar is given value nationally because it is the only currency that is acceptable as payment for taxation. The US dollar is given value internationally because it is the agreed upon currency for the purchase of petroleum. Everything else is smokescreen.
Random Derpy Family (7 months ago)
if fiat money isn't worth anything then why do people think it has value?
Saul Val (7 months ago)
Wouldn't it be a little better in the economy if we didn't have unhealthy food? Sugar and unhealthy man-made products that have no benefit to humans can solve a lot of problems with our economy.
Vishwa Mithra (8 months ago)
What if people offered the same goods and services for the same prices even with high amount of money in circulation?
FireBow (7 months ago)
Vishwa Mithra people would spend more money so people need to work more. If you work more, you get more money. With the high amount of money in circulation, you would get rich pretty fast a quit working. If everyone did that, the economy would crash. That's why there's always a slight inflation every year to avoid this from happening.
HENRYTHEONETHEONLY H (8 months ago)
Central banks have pumped more money into the system now than any other time in human history. So where is the hyperinflation? Maybe Ted-ed should do a video on a liquidity trap? Instead of these pointless videos on fallacious economic dogma.
lol (8 months ago)
Government doesn't print money, this video is extremely misleading and mostly false.
Heinz Ketchyp (8 months ago)
The Money isnt Printed by the gouvenrment but by the Federal Reserve
Norman Plombe (8 months ago)
Wow...what a sing-songy pandering description of the fiction that is our monetary system. We ARE on a commodity-backed currency. It's called the PETRODOLLAR. OPEC effectively determines the value of our dollar. The intrinsic value of a barrel of oil doesn't change. It contains the same BTUs of energy it always had and always will. The dollar changes around it, as determined by the people pricing oil...not the FED (which is a private bank) nor the government. Want to create money out of thin air? Just whip out your credit card. That money wasn't sitting in some vault or even an account on a computer. It is created when you BORROW it into existence....just like EVERY DOLLAR IN CIRCULATION. Wake up.
Parth Patel (8 months ago)
Cold fusion's video on this is much more revealing of the underlying monarchy the financial system all over the world implies. It's daunting actually. This is called faith money and one day will probably lead us all to infinite debt.
Hanaa A.A (8 months ago)
Carnegie,Rockefeller,Morgan ..etc They determine the Value of the dollar
William Cooke (8 months ago)
Quick question Even if there's so much money in circulation, doesn't a person still have to EARN it order to have it in his/her possession, hence, still maintaining the value of money?
Sajid Khan (8 months ago)
Helpful
Califa G (8 months ago)
Pure BS video!
Jose Aguirre (8 months ago)
The fed is a scam...

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