5 ms·

These are also precisely the kinds of things observed just before either (1) a market correction or (2) substantial inflation. This is not tenable.

GPerson 5y ago
This sounds like a personal hunch. Is there actually an observable pattern here? Can you give a source for this claim?
- swiley 5y ago
  Everything is more expensive? Labor Housing Gas Food Freaking computer components are more expensive! Those have always gone down.
- atwebb 5y ago
  As a direct response to the original post, it mentions 20% returns and doesn't seem to treat that as an outlier. That would indicate some serious inflation somewhere.
- rebelos 5y ago
  The broad money supply has shot up by almost 33% in roughly one year: https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL. Even though some prices have already gone up, we haven't felt the full effect of this yet because we're still emerging out of the pandemic and money velocity hasn't reverted to trend: https://fred.stlouisfed.org/series/M2V https://fred.stlouisfed.org/series/M2V. Roughly speaking, price level = money velocity * broad money supply.
  - dragonwriter 5y ago
    Money supply isn’t a thing which varies randomly, impacting the economy but not impacted by it. The money supply hasn’t shot up as some random event which will remain static if money velocity reverts to trend, it shot up specifically as a policy response to low velocity, and increasing velocity is one of the signals which will cause 8t to be reeled back in.
    - rebelos 5y ago
      That's a pretty bold assertion when the M2 chart itself demonstrates that broad money supply has never contracted in any substantial way. Federal and corporate debt to GDP are also at historic highs, which is precisely the environment in which the Fed prefers to let inflation run hot.
- imtringued 5y ago
  The savings glut that occurred before the 2008 crash didn't go away.

GPerson 5y ago

This sounds like a personal hunch. Is there actually an observable pattern here? Can you give a source for this claim?

swiley 5y ago
Everything is more expensive? Labor Housing Gas Food Freaking computer components are more expensive! Those have always gone down.
atwebb 5y ago
As a direct response to the original post, it mentions 20% returns and doesn't seem to treat that as an outlier. That would indicate some serious inflation somewhere.
rebelos 5y ago
The broad money supply has shot up by almost 33% in roughly one year: https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL. Even though some prices have already gone up, we haven't felt the full effect of this yet because we're still emerging out of the pandemic and money velocity hasn't reverted to trend: https://fred.stlouisfed.org/series/M2V https://fred.stlouisfed.org/series/M2V. Roughly speaking, price level = money velocity * broad money supply.
- dragonwriter 5y ago
  Money supply isn’t a thing which varies randomly, impacting the economy but not impacted by it. The money supply hasn’t shot up as some random event which will remain static if money velocity reverts to trend, it shot up specifically as a policy response to low velocity, and increasing velocity is one of the signals which will cause 8t to be reeled back in.
  - rebelos 5y ago
    That's a pretty bold assertion when the M2 chart itself demonstrates that broad money supply has never contracted in any substantial way. Federal and corporate debt to GDP are also at historic highs, which is precisely the environment in which the Fed prefers to let inflation run hot.
imtringued 5y ago
The savings glut that occurred before the 2008 crash didn't go away.