One of the best video to watch on RV. Thanks for reposting.

One of the most important real vision videos ever produced

Why do we need to unwind QE when private sector borrowing returns (and thereby suffer rapidly rising interest rates and falling bond prices)? Couldn't the Fed just increase the minimum reserves requirement for banks by a factor of 'X' to constrain the use of those reserves for 'excessive' private money creation? Yes, the Fed would need to keep rolling its US treasury and agency security holdings as they mature but I think no one expects the Fed to ever normalize it's balance sheet from where we are today. Comments on this would be welcome.

Great interview, would love to hear his views today. I second Koo and Werner debate/discussion.

Some good ideas to try, like the one suggested for European banks and Euro country sovereign debt issuance. But essentially this is still a Keynesian solution that does nothing to address excess leverage, zombified companies, mal-infestment, big government, onerous regulation, etc., etc.

great stuff

Excellent content

Just so well worth my time to revisit this gem of an interview. Bravo to Richard Koo, who couches his teaching in easy to understand language. And boy do I miss the greatest interviewer there is; Grant Williams. ( Actually he was the very reason I joined RV in 2016 )

Max (and whoever else at RV), thank you for digging up these gems.

My suggestion is Koo and Werner debate/discussion. One topic is QE potential effect on real lending in growing economy and money supply. Werner seemed convinced it has no effect at all in the princes of the yen Hendry interview. Second topic: how do we get out of this QE trap given coronavirus and what is the time horizon and likely outcomes given current state of Fed and private balance sheets.

More than four years later, he is more spot on than ever. And my god was some of this stuff terrifying. Or thrilling to the bone, if you are a true macro practitioner. Two of the most explosive reminders: -- All of the stagnant liquidity stored up in reserves via QE becomes an oh-my-god level problem when the private sector switches back to aggregate borrowing. It's like trillions in dry powder that was inert for years and years, and is suddenly ripe to ignite. -- The notion that a hugely expanded multi-trillion Fed balance sheet is a harmless inert object is false, because the Treasury still has to issue redemption bonds, which function like synthetic new issuance in terms of sucking up private sector capital, when Fed balance sheet assets mature. The big, big picture reminder from Koo is that the balance sheet really does "balance" in the end. Even if it takes 10 or 20 years sometimes, the paymaster still gets paid. And holy shnikes are the consequences going to be insane. And all of the stuff Koo talked about and warned of, virtualy all of it, was tripled down on and made worse by the pandemic. We are head into a golden age of macro -- golden, violent, and volatile as f--k -- that could last for decades.

Excellent. Please have him back soon. This is good setup for his assessment of what’s transpired since his last appearance. Let’s hear his take on the massive monetization of debt taking place now.

My Grandpa loved his book

As an accountant I am perfectly in sync with this point of view, thank you

Time to invite Mr. Richard Koo back!

Very Timely. Thank you.