For those of you like me who don't really understand economics, this episode of This American Life from January might be the best 30 minutes of your life. It explains in simple terms how central banking works and how the Fed "went to crazytown" to try to avoid financial meltdown in 2007 and 2008. If your time is limited, click here to jump to Act II and listen to the rare and candid interview with members of the Fed who bought $1.25 Trillion in toxic assets.
Source: Public Radio International - This American LifePROLOGUE.
Ira Glass speaks with several members of the Planet Money team, who all found themselves—in the course of their reporting—independently asking the same stoner-ish question: What is money? Ira and Planet Money producer Jacob Goldstein discuss a pre-industrial society on the island of Yap that used giant stones as currency. The book that Jacob read about Yap is called The Island of Stone Money. (10 minutes)
ACT ONE. THE LIE THAT SAVED BRAZIL.
A trip to a country where the fiction that is money completely fell apart. And in this same country, through a truly incredible piece of policy making, the government tricked a 150,000,000 people into believing their money had value again. Chana Joffe-Walt reports. (16 minutes)
ACT TWO. WEEKEND AT BERNANKE'S.
Though the name of the Federal Reserve includes the word "federal," it's not actually part of the government. It's an independent institution tasked with something very simple, but very huge: Creating money out of thin air. And during this last financial crisis, the leaders of the Fed did things that they would never have considered doing in the past. Alex Blumberg and David Kestenbaum report on what the Fed usually does, and how, since 2008, it's taken a trip to what amounts to Fed Crazytown. (26 minutes)
This is a Suspicious News Brief. You can find the original story at Public Radio International - This American Life.