4 ms·

> More than a decade on from the credit crisis, inflation is still scarce, with wages increasing only modestly despite large drops in unemployment. The ECB, for

> More than a decade on from the credit crisis, inflation is still scarce, with wages increasing only modestly despite large drops in unemployment. The ECB, for example, isn’t expected to get to its close-to-2% inflation target over the next decade, according to a market-derived measure. I find it baffling how everyone talks as if inflation is some incomprehensible force of nature out of anyone's control, even though it's actually trivial to cause inflation by printing money and buying assets. Then the article links to https://www.bloomberg.com/news/articles/2019-07-05/germany-s-tight-purse-strings-are-a-worry-when-borrowing-is-free https://www.bloomberg.com/news/articles/2019-07-05/germany-s... which states that Germany is being paid to borrow money but refuses (against the advice of economists) to actually do this and invest in anything? What? Why does it seem like nobody (with the relevant authority) is willing to do anything but stand around in paralysis worrying?

e40 7y ago
> Why does it seem like nobody (with the relevant authority) is willing to do anything but stand around in paralysis worrying? Maybe because those relevant authorities are more and more not very good at their jobs. It happened a bunch under Bush and his happening way more under our current POTUS. Unqualified people are being put in charge of large portions of our government, and there has to be some consequence. This might just be it.
efficax 7y ago
> I find it baffling how everyone talks as if inflation is some incomprehensible force of nature out of anyone's control, even though it's actually trivial to cause inflation by printing money and buying assets. But that is literally the mystery about the contemporary economy. The Fed has been printing money like mad with "quantitative easing", with extremely low interest rates, and Congress helping them along with massive tax cuts, but this is having basically 0 impact on inflation rates. We're printing money like mad and it's seemingly having no effect on prices.
- nshepperd 7y ago
  Yeah, except that the Fed has decided to undo all of that by selling off the assets it bought, effectively burning the money it spent so much effort printing. https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
- marvin 7y ago
  I'm no economist, but shouldn't it work nicely to just print money and pay it out equally to all citizens? Why hasn't anyone tried this yet?
  - H8crilA 7y ago
    This is called "QE for people", or "helicopter money", and economists know about this idea. It's still deep in the fringes, but in my opinion we can see this happen within our lives. https://en.m.wikipedia.org/wiki/Helicopter_money https://en.m.wikipedia.org/wiki/Helicopter_money
    - caf 7y ago
      The Australian Government's response to the GFC 10 years ago included a $900 payment to most taxpayers.
    - thoughtstheseus 7y ago
      A lot of ideas remain on the fringes for laymen until they are used. Quantitative easing like in 07/08 was discussed during the Great Depression.
  - wcoenen 7y ago
    Ray Dalio calls that "monetary policy 3". (MP1 is lowering interest rates, MP2 is buying financial assets.) In this article he gives some examples of forms of MP3 in the past: https://www.linkedin.com/pulse/its-time-look-more-carefully-monetary-policy-3-mp3-modern-ray-dalio/ https://www.linkedin.com/pulse/its-time-look-more-carefully-...
  - 7y ago

e40 7y ago

> Why does it seem like nobody (with the relevant authority) is willing to do anything but stand around in paralysis worrying? Maybe because those relevant authorities are more and more not very good at their jobs. It happened a bunch under Bush and his happening way more under our current POTUS. Unqualified people are being put in charge of large portions of our government, and there has to be some consequence. This might just be it.

efficax 7y ago

> I find it baffling how everyone talks as if inflation is some incomprehensible force of nature out of anyone's control, even though it's actually trivial to cause inflation by printing money and buying assets. But that is literally the mystery about the contemporary economy. The Fed has been printing money like mad with "quantitative easing", with extremely low interest rates, and Congress helping them along with massive tax cuts, but this is having basically 0 impact on inflation rates. We're printing money like mad and it's seemingly having no effect on prices.

nshepperd 7y ago
Yeah, except that the Fed has decided to undo all of that by selling off the assets it bought, effectively burning the money it spent so much effort printing. https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
marvin 7y ago
I'm no economist, but shouldn't it work nicely to just print money and pay it out equally to all citizens? Why hasn't anyone tried this yet?
- H8crilA 7y ago
  This is called "QE for people", or "helicopter money", and economists know about this idea. It's still deep in the fringes, but in my opinion we can see this happen within our lives. https://en.m.wikipedia.org/wiki/Helicopter_money https://en.m.wikipedia.org/wiki/Helicopter_money
  - caf 7y ago
    The Australian Government's response to the GFC 10 years ago included a $900 payment to most taxpayers.
  - thoughtstheseus 7y ago
    A lot of ideas remain on the fringes for laymen until they are used. Quantitative easing like in 07/08 was discussed during the Great Depression.
- wcoenen 7y ago
  Ray Dalio calls that "monetary policy 3". (MP1 is lowering interest rates, MP2 is buying financial assets.) In this article he gives some examples of forms of MP3 in the past: https://www.linkedin.com/pulse/its-time-look-more-carefully-monetary-policy-3-mp3-modern-ray-dalio/ https://www.linkedin.com/pulse/its-time-look-more-carefully-...
- 7y ago