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Thank you for the informative post. You write: > The end result is that deflation is blunted in the U.S., but it's a huge reason why despite QE we haven't see

Thank you for the informative post. You write: > The end result is that deflation is blunted in the U.S., but it's a huge reason why despite QE we haven't seen much inflation. My view has been that a pretty solid chunk of inflation has already happened, in the housing market, as measured by the change in house prices since ~Y2K, and by the expansion of the Fed's balance sheet by ~2T in MBS purchases. QE acted as a way to pay off the jumbo loans made to retail workers, house flippers, etc that were too large a burden for them to pay. What do you think of my theory?

eli_gottlieb 9y ago
>My view has been that a pretty solid chunk of inflation has already happened, in the housing market, as measured by the change in house prices since ~Y2K, and by the expansion of the Fed's balance sheet by ~2T in MBS purchases. Asset inflation is a rather distinct thing from across-the-board inflation, which would have to include wages.
- pjmorris 9y ago
  Deciding whether to buy T-Bills or invest in a hedge fund is an investment decision that a relative few make. Deciding whether to have a roof over your head or not is much more than an investment decision. I reason that asset inflation in house prices is a form of wage deflation. Asset and wage inflation may be distinct theoretical categories, but they affect each other in practice.
  - eli_gottlieb 9y ago
    That's some very insightful reasoning. Thanks for presenting it that way!