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This is the inflation that everyone is afraid of. Since the money has been mostly injected from the top of the society, it has been confined to the asset bubble
by cft 6y ago
This is the inflation that everyone is afraid of. Since the money has been mostly injected from the top of the society, it has been confined to the asset bubble. If this money filters through to the bottom or there's significant injection directly to the bottom (SBA payment protection, $1200 direct assistance, basic income, etc) then we will see consumer inflation as well
- jhallenworld 6y agoThere is much bigger risk of deflation during a depression. Do you really think there will be wage inflation when there is 20% unemployment?
- formercoder 6y agoExactly this is why I don’t understand the folks who think inflation is a purely monetary phenomenon. With demand shocks like this how can we not have deflation?
- grandridge 6y agoInflation comes from over reaction of trying to fight/prevent deflation
- MattGaiser 6y agoThey are people who have never bothered to look at an inflation table. They are content to blindly repeat that one economics textbook they read.
- changchuming 6y agoWall Street and main street are two different markets. OP specifically said we'll see consumer price inflation only if money trickles down to consumers, which is evidently not the case. Asset prices has gone to the moon however since 2008.
- FlyMoreRockets 6y agoToo many people competing for too few jobs should keep wages down.
- lazylizard 6y agoThe direct injection to the bottom doesn't even cover what income they've lost since 3 months ago..why would there be inflation?
- wbl 6y agoQuantity times velocity equals GDP times price level. Velocity just went way down.
- cft 6y agoThis is the right start. But it's not a closed system: there's an import/export balance.
- MattGaiser 6y agoWe are still waiting for the surge of inflation you inflation hawks complained about in 2008 when this was all last done... https://www.usinflationcalculator.com/inflation/current-inflation-rates/ https://www.usinflationcalculator.com/inflation/current-infl...
- DesiLurker 6y agowasn't that injection more like a loan that was paid back? IIRC we actually made a tiny profit on it. but this time they are just given it away or some terms that amount to it. so eventually there is a bigger chance of it. but then BOJ has been purchasing stocks for what a decade now and japan still does not has that level of inflation.
- proverbialbunny 6y agoBetween 2/3rds and 3/4ths were paid off. The current administration has been quite lax about paying off debt, instead pumping money into the market like jet fuel in 2018 and 2019. I'm not worried about inflation. Most people do not understand how it works yet assume they understand it. Inflation is a complex subject.
- changchuming 6y agoHe did specifically say asset bubble. And look at how much the stock market has grown since 2008. It has outpaced CPI by a huge margin.
- mrep 6y agoAnnualized S&P 500 Return with Dividends Reinvested from april 2008 to april 2020 are 8.285% [0] which is entirely in line with historical returns [1]. How is that an asset bubble? [0]: https://dqydj.com/sp-500-return-calculator/ https://dqydj.com/sp-500-return-calculator/ [1]: https://en.wikipedia.org/wiki/S%26P_500_Index#Performance https://en.wikipedia.org/wiki/S%26P_500_Index#Performance
- mancerayder 6y ago