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With the federal reserve pumping out money like nobodies business, the resulting inflation is a major brake on the economy. It also results in less profits for

by MCRed 11y ago

With the federal reserve pumping out money like nobodies business, the resulting inflation is a major brake on the economy. It also results in less profits for companies, less income growth for employees etc. The only people it really benefits are wall street and other politically well connected entities (solyndra et. al.) The government is basically sucking up all of the value from advances in technology ,and redirecting it to the political class who then profit from the carry trade of investing it in the stock market and the like. Ironically, of course, none of the mainstream candidates for president will fight this, though many of them are trying to get elected on the backs of the outrage over "income inequality"... and this comment is likely to be buried because it points out a crime committed under both Bush and Obama and nobody wants to admit their guy is a bad guy.

dragonwriter 11y ago
> The only people it really benefits are wall street People with net dollar-denominated asset balance (e.g., net holders of financial capital denominated in dollars) lose value with inflation (people with net dollar-denominated liability balance -- net debtors -- are the winners with inflation.) > The government is basically sucking up all of the value from advances in technology ,and redirecting it to the political class who then profit from the carry trade of investing it in the stock market and the like. To the extent that's true at all, that's a product of fiscal policy (particularly, the favorable tax treatment of capital gains compared to "vanilla" income, and the additional taxation in the form of payroll tax on top of income tax levied on labor income compared to "vanilla" income) rather than monetary policy. Which, rather than being a distinct problem from "income inequality", is actually the same problem as income inequality.
codyb 11y ago
Inflation rates were very low in 2015 (sometimes even slightly negative) [0], and historically have been relatively constant at around 1-5% (even during the economic crisis of 2008). Aside from extraneous years of course where it hit high teens. So, yea, if there is a break on the US economy, it doesn't appear to be stemming from inflation. The United States has an extremely diversified economy, plenty of natural resources, an abundance of talent, a relatively low population, incredible military strength, technological dominance in many areas, a healthy population (unlike, as pointed out, some countries which are declining in population, or about to hit cliffs where the majority of the population is above the working age), and huge geographical buffers. Some economists say the dollar might be too strong for short term gains for the American worker, and the Fed is having trouble hitting inflation targets between 1-3%. The private sector benefits primarily from government funding of research. So I'm just not sure where you're basing your analysis from? [0] - http://www.usinflationcalculator.com/inflation/historical-inflation-rates/ http://www.usinflationcalculator.com/inflation/historical-in...
deleted 11y ago
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smaddox 11y ago
The people who benefit most from monetary inflation are those with large amounts of debt, not those with large amounts of cash. The middle class has the highest debt-to-cash ratio, so they benefit the most. However, the point is moot because there has not been significant monetary inflation. Only asset prices have really risen in response to quantitative easing (perhaps this is why you said it only helps wall street); this is a somewhat intuitively obvious result since the fed is buying assets, not printing money.

by MCRed 11y ago

dragonwriter 11y ago

> The only people it really benefits are wall street People with net dollar-denominated asset balance (e.g., net holders of financial capital denominated in dollars) lose value with inflation (people with net dollar-denominated liability balance -- net debtors -- are the winners with inflation.) > The government is basically sucking up all of the value from advances in technology ,and redirecting it to the political class who then profit from the carry trade of investing it in the stock market and the like. To the extent that's true at all, that's a product of fiscal policy (particularly, the favorable tax treatment of capital gains compared to "vanilla" income, and the additional taxation in the form of payroll tax on top of income tax levied on labor income compared to "vanilla" income) rather than monetary policy. Which, rather than being a distinct problem from "income inequality", is actually the same problem as income inequality.

codyb 11y ago

Inflation rates were very low in 2015 (sometimes even slightly negative) [0], and historically have been relatively constant at around 1-5% (even during the economic crisis of 2008). Aside from extraneous years of course where it hit high teens. So, yea, if there is a break on the US economy, it doesn't appear to be stemming from inflation. The United States has an extremely diversified economy, plenty of natural resources, an abundance of talent, a relatively low population, incredible military strength, technological dominance in many areas, a healthy population (unlike, as pointed out, some countries which are declining in population, or about to hit cliffs where the majority of the population is above the working age), and huge geographical buffers. Some economists say the dollar might be too strong for short term gains for the American worker, and the Fed is having trouble hitting inflation targets between 1-3%. The private sector benefits primarily from government funding of research. So I'm just not sure where you're basing your analysis from? [0] - http://www.usinflationcalculator.com/inflation/historical-inflation-rates/ http://www.usinflationcalculator.com/inflation/historical-in...

deleted 11y ago

[deleted]

smaddox 11y ago

The people who benefit most from monetary inflation are those with large amounts of debt, not those with large amounts of cash. The middle class has the highest debt-to-cash ratio, so they benefit the most. However, the point is moot because there has not been significant monetary inflation. Only asset prices have really risen in response to quantitative easing (perhaps this is why you said it only helps wall street); this is a somewhat intuitively obvious result since the fed is buying assets, not printing money.