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> 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 c

> 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-...
- vmurthy 7y ago
  Like /u/photojosh mentioned above, it's no good to print money and equally hand over to citizens if most of the citizens don't buy anything :-). Photojosh's comment breaks down how the citizens might be doing it.
rsync 7y ago
"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." One conclusion that you might draw is that we are in a massively deflationary environment. So much so that all of the inflation tools running at full-tilt only keep us in place. Among other things, birth rates in rich, developed countries have been dropping for decades and are below replacement rate in many of them. Does that sound inflationary to you ?
- H8crilA 7y ago
  It's even worse in Japan. The BOJ is not only buying bonds, it's straight up buying equity ETFs. Still no inflation.
photojosh 7y ago
Where's that money going though? It can only drive inflation if it's actually increasing demand, and I don't think that's happening. I think there's a fallacy of aggregation required to call it a mystery, if we disaggregate even slightly I think that argument falls apart. eg, my anecdotal view is that: 1. the rich just put extra money into investment 2. the upper middle-class are just putting any extra money into paying down their debts: housing and student loans. 3. the lower-middle and lower classes are increasingly precarious; and they're not actually seeing any extra money. 4. big business are just doing stock-buybacks, and any profits are just going back into 1 5. small business are struggling because of 2 and 3 What is there in all that to drive inflation? (edit to fix list)

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-...
vmurthy 7y ago
Like /u/photojosh mentioned above, it's no good to print money and equally hand over to citizens if most of the citizens don't buy anything :-). Photojosh's comment breaks down how the citizens might be doing it.

rsync 7y ago

"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." One conclusion that you might draw is that we are in a massively deflationary environment. So much so that all of the inflation tools running at full-tilt only keep us in place. Among other things, birth rates in rich, developed countries have been dropping for decades and are below replacement rate in many of them. Does that sound inflationary to you ?

H8crilA 7y ago
It's even worse in Japan. The BOJ is not only buying bonds, it's straight up buying equity ETFs. Still no inflation.

photojosh 7y ago

Where's that money going though? It can only drive inflation if it's actually increasing demand, and I don't think that's happening. I think there's a fallacy of aggregation required to call it a mystery, if we disaggregate even slightly I think that argument falls apart. eg, my anecdotal view is that: 1. the rich just put extra money into investment 2. the upper middle-class are just putting any extra money into paying down their debts: housing and student loans. 3. the lower-middle and lower classes are increasingly precarious; and they're not actually seeing any extra money. 4. big business are just doing stock-buybacks, and any profits are just going back into 1 5. small business are struggling because of 2 and 3 What is there in all that to drive inflation? (edit to fix list)