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> lol, printing money wouldn't have changed anything there. If they made a -5% real return with no printing, and there's a 2% inflation rate, they'd have made a

> lol, printing money wouldn't have changed anything there. If they made a -5% real return with no printing, and there's a 2% inflation rate, they'd have made a -3% notional return, or, and I believe this is true, a -5% real return. This makes no sense. You print money and spend it on buggy whips, they continue to make a positive return. Because you printed money and took up the slack demand. > Just as a 2006 vintage Krug isn't the same as a 2010 vintage Krug, a 2006 vintage dollar isn't the same as a 2010 vintage dollar. This doesn’t make sense either, in 2010 the 2006 dollar is worth the same as the 2010 dollar.

arcticbull 6y ago
> This doesn’t make sense either, in 2010 the 2006 dollar is worth the same as the 2010 dollar. No, it isn't. A 2006 dollar is worth ((1 + 0.02)^15) = $1.34 in 2021 dollars. A 2010 dollar is worth ((1 + 0.02)^11) = $1.24. Each reflects a slice of the GDP in the year of issue and if you'd exchanged it for assets in the year of issue like you were supposed to you'd have preserved that value. You chose to bring it forward into 2021 without investing it like you were supposed to. You willingly took the haircut. That's the only way they're worth the same - your forfeiture of time value.
- chordalkeyboard 6y ago
  You misunderstood my comment. > if you'd exchanged it for assets in the year of issue like you were supposed to like you were supposed to This is exactly how the central bank policy is set up for the wealthy. > You willingly took the haircut. Alas, most Americans (and all the poor ones) do not have the same access to investment opportunities as myself.
  - arcticbull 6y ago
    > like you were supposed to This is exactly how the central bank policy is set up for the wealthy. The poor have no assets to invest. > Alas, most Americans (and all the poor ones) do not have the same access to investment opportunities as myself. Yes they do. If they have money, they have Robinhood. If they don't have money, inflation doesn't matter.
    - chordalkeyboard 6y ago
      > The poor have no assets to invest. They (or their households) have an income, which is paid in units that are constantly depreciating while the investments are increasing in nominal terms. Of course they have no assets, because central bank policies have priced all of the assets out of their reach. > Yes they do. If they have money, they have Robinhood. If they don't have money, inflation doesn't matter. They don’t have enough time after working and chores to investigate which assets to purchase on the stock market, which is why banks existed before the central bank destroyed the savings market.
      - arcticbull 6y ago
        > They don’t have enough time after working and chores to investigate which assets to purchase on the stock market, which is why banks existed before the central bank destroyed the savings market. There's plenty of roboadvisors with no minimums like Betterment or Wealthfront. There's Acorns. There's all sorts of technology to solve this problem. Heck how much time does it take to hit "buy" on SPY in RH once a quarter? I'm pretty busy but somehow I find the time to day-trade /NQ futures. What do you mean "destroyed the savings market" -- remember when interest rates were 12% poor people couldn't really afford much house. How much good is a savings account when you can't afford anything? I suspect they'd be more than willing to trade a 2% mortgage interest rate for having to download a second app on their phone.
dragonwriter 6y ago
> You print money and spend it on buggy whips, they continue to make a positive return Sure, but no one is talking about combining general monetary expansion with targeted fiscal stimulus on the industries experiencing a drop in market demand. (There might be good reason to do that to avoid capacity loss if you had a good reason to believe that it was a transitory loss in an industry where even with the buffering provided by inflation, production cuts would, absent fiscal intervention, be so severe as to result in abandonment/neglect/destruction of capital goods that would adversely effect an expected recovery, but that’s a far different issue than monetary inflation alone.)
- deleted 6y ago
  [deleted]

arcticbull 6y ago

> This doesn’t make sense either, in 2010 the 2006 dollar is worth the same as the 2010 dollar. No, it isn't. A 2006 dollar is worth ((1 + 0.02)^15) = $1.34 in 2021 dollars. A 2010 dollar is worth ((1 + 0.02)^11) = $1.24. Each reflects a slice of the GDP in the year of issue and if you'd exchanged it for assets in the year of issue like you were supposed to you'd have preserved that value. You chose to bring it forward into 2021 without investing it like you were supposed to. You willingly took the haircut. That's the only way they're worth the same - your forfeiture of time value.

chordalkeyboard 6y ago
You misunderstood my comment. > if you'd exchanged it for assets in the year of issue like you were supposed to like you were supposed to This is exactly how the central bank policy is set up for the wealthy. > You willingly took the haircut. Alas, most Americans (and all the poor ones) do not have the same access to investment opportunities as myself.
- arcticbull 6y ago
  > like you were supposed to This is exactly how the central bank policy is set up for the wealthy. The poor have no assets to invest. > Alas, most Americans (and all the poor ones) do not have the same access to investment opportunities as myself. Yes they do. If they have money, they have Robinhood. If they don't have money, inflation doesn't matter.
  - chordalkeyboard 6y ago
    > The poor have no assets to invest. They (or their households) have an income, which is paid in units that are constantly depreciating while the investments are increasing in nominal terms. Of course they have no assets, because central bank policies have priced all of the assets out of their reach. > Yes they do. If they have money, they have Robinhood. If they don't have money, inflation doesn't matter. They don’t have enough time after working and chores to investigate which assets to purchase on the stock market, which is why banks existed before the central bank destroyed the savings market.
    - arcticbull 6y ago
      > They don’t have enough time after working and chores to investigate which assets to purchase on the stock market, which is why banks existed before the central bank destroyed the savings market. There's plenty of roboadvisors with no minimums like Betterment or Wealthfront. There's Acorns. There's all sorts of technology to solve this problem. Heck how much time does it take to hit "buy" on SPY in RH once a quarter? I'm pretty busy but somehow I find the time to day-trade /NQ futures. What do you mean "destroyed the savings market" -- remember when interest rates were 12% poor people couldn't really afford much house. How much good is a savings account when you can't afford anything? I suspect they'd be more than willing to trade a 2% mortgage interest rate for having to download a second app on their phone.

dragonwriter 6y ago

> You print money and spend it on buggy whips, they continue to make a positive return Sure, but no one is talking about combining general monetary expansion with targeted fiscal stimulus on the industries experiencing a drop in market demand. (There might be good reason to do that to avoid capacity loss if you had a good reason to believe that it was a transitory loss in an industry where even with the buffering provided by inflation, production cuts would, absent fiscal intervention, be so severe as to result in abandonment/neglect/destruction of capital goods that would adversely effect an expected recovery, but that’s a far different issue than monetary inflation alone.)

deleted 6y ago
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