PE51: The Fed, the Discount rate, and the Great Depression (VI)

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This is the fifty-first video installment from Porkopolis Economics, covering macro and money, from the creator of the Crypto Voices podcast.

Contents
00:00 Intro
01:00 What does the central bank do?
01:40 How do Fed interest rates compare with history?
03:13 Is the interest rate the price of money?
05:47 Centralized control of interest rates
06:30 Roaring 20s and Great Depression
06:45 Why the 'Discount rate?'
09:12 What does the 'Discount rate' mean in Fed-speak?
09:59 'Discount window' was Fed lending directly until 1930s
11:55 Discount rate during Roaring 20s
13:36 Wisdom from Oskar Morgenstern on prices
15:10 Irving Fisher on Stable Money League
16:25 Discount rate into Depression of 1920-21
18:25 Discount rate lowers into Roaring 20s
20:50 Interest rates at near-historical highs into Great Depression

Here we look at the Federal Reserve's weekly balance sheet versus its base policy interest rate in the 1910s and 1920s, which is called the 'Discount rate.' In the early days, this was the rate of interest that banks could get for borrowing directly from the Federal Reserve (and not just in emergency situations, as is the case today), called the 'Discount window.' Many banks directly borrowed from the Federal Reserve in the 1910s and 1920s.

We also answer some basic questions like:
- What is the price of money?
- What is the price of credit?
- What is the etymology of 'Discount rate?'
- How did the Federal Reserve manipulate interest rates in the early days?
- Have stocks reached a permanently high plateau?

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