A Hilarious Animated Take On The Federal Reserve: Xtranormal (VIDEO)

UPDATE: Credit is due to Omid Malekan, who created this amazing video.

ORIGINAL POST: For probably the first time ever, monetary policy has become hilarious.

In a new video, two characters discuss the Federal Reserve's quantitative easing policy, presenting it as a desperate and hopelessly misguided effort to save the world economy (hat tip to Credit Writedowns). The short film, made in Xtranormal and featuring two "pawz" characters, lays out the Fed's $900 billion asset-purchase plan in simple, if imprecise, terms.

"The Ben Bernake" (they pronounce it "Ber-nank") is working with "the Goldman Sachs" to engage in "the printing money," the video says. But the Fed can't call it that: "'The printing money' is the last refuge of failed economic empires and banana republics, and the Fed doesn't want to admit this is their only idea."

The character in the striped shirt has some choice words for Fed chairmen, past and present.

"So has the Fed ever been right about anything?," his associate asks.

"Let me see if I can think of anything," the striped-shirt pawz responds.

Pause.

"No. Nothing."

WATCH below:

Comments

[Bertski]

03:54 PM on 11/24/2010

I felt oddly conflicted over laughing hysterically at this video, because laughing at it in some way diminishes the damage being done to this country and its taxpayers.

[econ1]

03:16 PM on 11/24/2010

That is very funny. I have to agree that prices on tuition, food, clothing, gasoline, fuel oil, rent, stamps (attempted) and lots of other things seem to be going up faster than 0%.

[JL-Sosa]

01:27 PM on 11/21/2010

The Quantitative Easing... I love it.

[Smart One]

06:47 PM on 11/18/2010

The video completely fails to address that a key reason that the currency is being devalued is to make imports from China and elsewhere more expensive. Conversely, our exports become cheaper. We currently import much more then we export. From the perspective of the american manufacturer and worker this is a very bad situation.

China keeps its currency (the Yuan) artificially low. This makes Chinese imports even cheaper. We are simply fighting back. As the dollar devalues our exports become cheaper, our manufacturing sector grows and america benefits. Obviously, you don't want to devalue the currency too much or you will be in real trouble, the Fed knows this and they are no where near this level of devaluation.

So to all you Fed haters who don't have a clue. Now you have one.

[Lancey Pratt]

11:08 PM on 11/18/2010

Dollar devaluation decreases the burden of our National Debt. This hurts all lenders, including the Chinese who will be paid back with devalued dollars. Our Federal Government needs lenders; it is only about 3/5 funded by taxation; the difference is made up by borrowing/printing what is now $5 billion per business day.

Dollar devaluation incentivizes central banks and investors to sell dollars. A feedback loop may emerge in which dollar sellers successively undercut each other, selling dollars for less, and less, and less. Nobody would want to be the loser in this race to the bottom.

In Weimar Germany, the government printed money in an effort to pay reparations for WWI. The result was an exchange rate that ballooned from four to four trillion German marks per USD. German money literally became worth less than a rectangle of toilet paper. The German peoples’ suffering and the rise of Hitler are examples of the danger posed by currency collapse.

We may be “nowhere near this level of devaluation.” But we may be fast approaching it.

In 2010 America, we are on the verge of having our foreign, fiscal, and monetary policy completely repudiated. Last year, The Atlantic published “The Quiet Coup,” an article about how “The Goldman Sachs” et al. are really in charge. With 200,000,000 guns in this country, and an imperiled currency, the next coup may not be so quiet.

[Weebad1]

05:49 PM on 11/18/2010

There are opposing views to Omid's views on economics.... http://www.youtube.com/watch?v=RUxBDdjsCmk

I'd also like to point out that if you take the time to watch Omid's other uploads, you'll find that he has some very odd views that I think many would find offensive. Unfortunately, nothing is as offensive as having 1.5 million viewers get their ideas about the Fed from talking dogs... this issue isn't about economic policy, it's about distrust of anything that the government touches by the same people who believed everything the government said when we were led to war in Iraq. Halliburton=good. Goldman Sachs=Bad. Really? Come on...

[Name Not In Use]

03:57 PM on 11/18/2010

So, we can generate a petition with maybe three zillion signature because an on-air personality gets canned but ...

blowing the whistle in Washington?

Don't complain, then, when you get the memo from The Goldman Sachs:

All your asset are mine!

All the worthless paper are urine.

[Publius67]

10:24 PM on 11/17/2010

Well The GoldManSachs is the one running up oil prices too.

Interesting how the cute bears gloss over the Ben Bernak's credentials as a leading scholar on the Depression - which we managed to avoid.

[talkofliberty]

02:21 PM on 11/18/2010

The Economy is still a mess, and debt is exploding everywhere. We are hardly out of the woods yet.

[cloaca]

09:40 PM on 11/18/2010

Hold your breath when you say that.

[sloppybear16]

10:03 PM on 11/17/2010

This is the beginning of the END of THE FED!

[Rynox]

01:10 PM on 11/17/2010

Deflation is not the opposite of inflation. You can not fight deflation with inflation. It is possible to experience periods of simultaneous inflation and deflation and we are currently in this kind of cycle.

[leopardpm]

01:22 PM on 11/17/2010

can you define, separately, both inflation and deflation?

[Rynox]

01:37 PM on 11/17/2010

Yes. Inflation is the decrease in value of paper money. The best measure of inflation is commodity prices, usually gold prices, but since gold has been seen as a safe haven lately, I suspect there is a small gold bubble building. So, a more appropriate measure of the dollars value might be silver or platinum. Both of which are up significantly meaning that the purchasing power of the dollar has been diminished. The opposite of inflation is negative inflation. It occurs when the central bank removes money from circulation, effectively increasing the purchasing power of paper money.

Deflation is a decrease in consumer prices, usually because of weak demand. Think of a shoe store in the middle of a recession, reducing the price of socks to make sure he sells some of his products. The only way to fix deflation is by increasing demand.

[Aluminaste]

11:38 AM on 11/17/2010

How could something so cute make me so very sad...

[The Dude67]

07:57 AM on 11/17/2010

A great video and required viewing for anyone who steps into a voting booth.

[mootown]

07:32 AM on 11/17/2010

Hilarious? It is very, very frightening. There is no way for us to stop this, it seems. What does the average person do? How can we protect ourselves and our families? We see the only trickle down that is in effect in our very streets, cities, villages, s chools, police departments, and food pantries now. How long before it is oozing under my door.

[Name Not In Use]

04:11 AM on 11/18/2010

You can buy 50 pounds of rice at Sam's Club for about $12.00.

Make sure you have enough calories to last a year or so.

You can do that with pinto beans and rice for less than $100.

I'm just sayin' .,,

When the shelves are empty they are empty.

[lyredragon]

11:22 PM on 11/16/2010

scary and amusing

[thestargazer]

11:12 PM on 11/16/2010

Awesome!

[leorising]

10:31 PM on 11/16/2010

Before you panic, watch this one too: http://www.youtube.com/watch?v=RUxBDdjsCmk . It's a direct refutation, and perhaps a clearer explanation. Maybe. I'm no economist, after all.

[leopardpm]

11:03 PM on 11/16/2010

look, watch your refutation again... they don't
explain', just say vague things and call people names who think otherwise. The video talks alot about exports and the 'benefits' of devaluing the dollar which increases the US exports. First, realize that 'the US' does not export, as a whole... there are companies IN the US which export, and yes, this would increase the demand for their products. The problem is that it ALSO, at the same time, DECREASES the value of ALL dollars, dollars which ALL citizens use to buy things... so, yeah, some companies benefit by getting to sell more goods, but everyone is hurt because WE cannot buy as many goods, either at home or abroad!

Talk about 'talking points' - this video is full of them. If you want a complete and full refutation AND explanation of this video and the economic fallacies it contains, I will spend the time to write up a thorough paper and post it as a PDF to read - but that is alot of work so please don't ask if you really don't care to take the time to understand it (don't worry, its not rocket science stuff)...

[leorising]

11:35 PM on 11/16/2010

Erm, I'm obviously confused by the whole deal. I do have cognitive problems, and this stuff is pretty slippery for me. I personally would not benefit from a thorough paper -- I leave it to others to request it if they'd like. And thanks for your reply.

[Name Not In Use]

04:06 AM on 11/18/2010

"BTW: what does 'following me' mean? sounds kinda creepy!!!! I followed back, if that matters at all... "

Welcome to "Social News"! .... It's terribly addicting.

You should be aware of a couple things I have learned...

Long, thoughtful replies are not the norm.

Think snarky banter among drunk friends.

Creating a long PDF is not the best use of your time because it is still just your opinion and, unless you are a Senator or something, no one really cares all that much about your opinion except you!

I really hate to be the one to tell you this.

It took me many decades to understand this but maybe it will save you some time!

Have fun!!

[Bruce Kindy]

10:53 AM on 11/17/2010

It's neither a clearer explanation nor a credible refutation. The CPI is a manipulated index that no longer includes many of the necessities of daily living. There are several reasons for that, not the least of which is that social security increases are tied to the CPI. This is liberal party line, period. You'll notice the video didn't address the purchasing of bonds by the Fed through Goldman Sachs rather than directly from the government. Check out who profited over the last couple of years...the Fed and Goldman Sachs. Coincidence? The time to panic is here. Check out the book "Aftershock."

[Jamie Barnes]

11:59 PM on 11/17/2010

My understanding is that the bonds are purchased at auction. Why is it repeatedly stated as fact that Goldman is the seller? When/if they are chosen it's because they have the lowest price, how else should it work? Surely you don't suggest the Fed just buy from the treasury? That would remove the benefit of lower interest rates and bank solvency (a lot of the reason for taking this step) while simultaneously increasing the concerns everyone has about the QE to begin with... inflation and diminished confidence in the dollar. As much as we despise the big banks, they are an important part of our economy and the gatekeepers to credit.