2 ms·

I don't know that I agree that capital is "under appreciated". Capital is infinite. The US just prints an unlimited supply of dollars, and that has no effect o

I don't know that I agree that capital is "under appreciated". Capital is infinite. The US just prints an unlimited supply of dollars, and that has no effect on the value of the dollar. Governments around the world are now offering negative interest rate bonds and investors are buying them. The stock market will keep going up and never crash. Money just churns. There's no way to stop it. Basically, there is too much money looking to invest around the world. Billions in hedge funds, pension funds, retirement accounts... Just billions and billions looking for a home. And there's not really a good reason it will ever go away. Investors can't stop investing. They can't just sit there with a pile of cash. So investment will never end. We've entered a time of infinite capital. Borrow $15 billion and we'll pay you to take it from us.

sokoloff 7y ago
The US does not "[print] an unlimited supply of dollars" for if we did, they would cease to be the world reserve currency and be valueless. Dollars are basically a claim on labor or natural resources. That we print slightly (in relative terms) more each year is what causes the slow devaluing of existing dollars in circulation. This is also known as inflation. (The linkage isn't quite that direct, but it's fairly close to it.)
- unreal37 7y ago
  They sure do. The M1 money supply has gone from 1.5 trillion in 2009 to 3.8 trillion today. That's 2.5X more money in circulation in 10 years. A graph of that is a hockey stick - basically a 45 degree angle. The dollar remains strong. Inflation remains low. Unemployment at record lows. Stock market at record highs. There is no sign that printing $20 billion per month for the last 10 years has had any negative effects. The printing machines don't stop. Won't stop. Can't stop. https://tradingeconomics.com/united-states/money-supply-m1 https://tradingeconomics.com/united-states/money-supply-m1

sokoloff 7y ago

The US does not "[print] an unlimited supply of dollars" for if we did, they would cease to be the world reserve currency and be valueless. Dollars are basically a claim on labor or natural resources. That we print slightly (in relative terms) more each year is what causes the slow devaluing of existing dollars in circulation. This is also known as inflation. (The linkage isn't quite that direct, but it's fairly close to it.)

unreal37 7y ago
They sure do. The M1 money supply has gone from 1.5 trillion in 2009 to 3.8 trillion today. That's 2.5X more money in circulation in 10 years. A graph of that is a hockey stick - basically a 45 degree angle. The dollar remains strong. Inflation remains low. Unemployment at record lows. Stock market at record highs. There is no sign that printing $20 billion per month for the last 10 years has had any negative effects. The printing machines don't stop. Won't stop. Can't stop. https://tradingeconomics.com/united-states/money-supply-m1 https://tradingeconomics.com/united-states/money-supply-m1