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The grandparent says explicitly in the comment "all the central banks". We are not talking specifically about the USA. Anyway, the "reserve currency" excuse do
by RobertoG 6y ago
The grandparent says explicitly in the comment "all the central banks". We are not talking specifically about the USA.
Anyway, the "reserve currency" excuse doesn't explain Japan in the last 20 years or the Euro in the last ten. The theory is just wrong. I don't know what more have to happen for people changing their minds.
It's spending what can generate inflation, specifically, spending above what the economy can produce. If Biden tomorrow created a trillion dollar coin and keep it under their bed, there will not be inflation. If the Central Banks create reserves, the interest rate will fall to zero (but not more), and if, despise the low interest rates, nobody is borrowing, there will not be inflation.
- Threeve303 6y agoI was referring more to your comment that inflation can be caused by only two things. It's much more complicated than that. In fact, if you were able to predict such things with an accuracy matching the confidence of your position, you would be a very wealthy person indeed.
- neilwilson 6y agoInflation is caused by somebody asking for more money and somebody else paying it. That's a failure of competition keeping prices in check, and little else. The wealthy person you are looking for is Warren Mosler. He retired to the US Virgin Islands many years ago having made a fortune off the back of people who believed in the Quantity Theory of Money You can read his conclusions in the book "Soft Currency Economics".