6 ms·

Printing free money has consequences. This is entirely expected with that causation. It will get worse. Hold value in assets, not money. Property, precious meta

Printing free money has consequences. This is entirely expected with that causation. It will get worse. Hold value in assets, not money. Property, precious metals, art, whatever isn’t cash until the money printing stops.

quotemstr 5y ago
> Printing free money has consequences Yet the story we heard over and over from "experts" was that for some complicated theoretical reason exploding the money supply wouldn't cause inflation --- and then, after inflation became impossible to just ignore, that the inflation was due to complicated "supply chain hiccup" and would be "transitory". Whatever. Common sense is a real thing that exists. Expertise doesn't make someone correct: it just makes him knowledgeable. An expert under pressure to arrive at a false conclusion (often for political reasons) will use that knowledge to bamboozle you. The general public should think more critically and reflect on why they allowed motivated economic experts to tell them blatant (and not just in hindsight) lies about the consequences of running the money printer.
- xadhominemx 5y ago
  The spike in energy and commodity costs has way more to do with supply side dynamics. Upstream suppliers have been hesitant to add capacity because they can’t tell if the spike in demand is sustainable or just a snapback post-lockdown. And OPEC in particular is pressing their advantage when no bank wants to fund frackers that have over invested and then wiped out 3 or 4 times now. We are seeing this in many industries. Inflation hawks/ideologues have called 15 out of the past 0 hyperinflationary cycles and this one will be no different.
- nickthemagicman 5y ago
  "Trust the experts" has been the motto going around for a while now. It makes it easy to outsource your own critical thinking by letting the "experts" do it. The experts should just be one data point not THE SOURCE OF ULTIMATE TRUTH.
  - jpgvm 5y ago
    If you aren't a doctor your "own critical thinking" will have little bearing on the correct treatment or prevention of a disease/illness/injury, doubly so for complex ailments for viruses, cancers and genetic diseases. Pretty much the same goes for civil engineering, particle physics and any other highly trained field that requires vast quantities of knowledge to even intuit probable outcomes. Why is economics any different? I don't believe it is, I would say economics falls into a similar bucket as weather science where there are always large unknowns that make broad predictions imprecise but that doesn't invalidate their expertise and ignoring it is definitely foolish. Experts are experts for a reason. If you could intuit all difficult problems as a layman we would have already advanced science far beyond where we currently stand.
    - quotemstr 5y ago
      Skepticism of medical practice isn't a stupid Steve-Jobs-like trust in woo over science. It's getting multiple opinions, reading the underlying papers, asking "does this explanation make sense?", and checking for obvious mistakes --- as medicine, like any other human endeavor, is full of human error. Plenty of people have found cures for their medical problems only after they kept doggedly pressing medical people for things that made sense and actually worked for them. Something didn't seem right to them, and they pulled and pulled at threads to find out what it was. You don't need a medical degree to do that: you just need a brain. It's gravely concerning to see hostility directed at people who tell others to think for themselves, question experts, and adopt a general attitude of informed skepticism. Too many people get genuinely offended when you indicate that you're going to do your own thinking and not just follow "experts". They bring out cliches like "experts are experts for a reason" and "look at this one guy who did something stupid" and neglect, or even suppress, the idea that we at all, each and every one of us, scientists of our lives and competent to make our own decisions and form our own opinions.
      - jpgvm 5y ago
        There is a big difference between thinking for ourselves and the sort of broad rejection of expertise we are seeing, especially in the US. In a vacuum, yes. Skepticism isn't just healthy, it's what powers science itself. However this isn't a vacuum and most people that "question the experts" aren't doing so in good-faith. Your ability to question an existing theory is proportional to your understanding the problem space itself and knowledge of the existing facts. Basically in order to question an expert realistically you need to be an expert yourself. This shouldn't be controversial, but for some reason it is. :/
- bojangleslover 5y ago
  The same experts who leave education and real estate, two things everybody wants, off the CPI
  - mikeyouse 5y ago
    What? Both are included; https://www.bls.gov/cpi/factsheets/college-tuition.htm https://www.bls.gov/cpi/factsheets/college-tuition.htm https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-and-rent.pdf https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...
- Spooky23 5y ago
  > The general public should think more critically and reflect on why they allowed motivated economic experts to tell them blatant (and not just in hindsight) lies about the consequences of running the money printer. The reality of not taking action has consequences. The opening of the money floodgates in the 80s blunted the pain of the late 60s and 70s. The war economy of 2002- likewise dulled the lows.
- titzer 5y ago
  > motivated economic experts Pretty much all economics that you just casually hear about is going to be economics intentionally put in service of furthering the system of rich and powerful elites. It's just more propaganda pushed at you and has absolutely no relation to what is good for society, the average person, the longevity of our civilization, or the environment. It is, in short, sophisticated bullshit to let rich people keep getting richer and live like the leeches they are.
- goodpoint 5y ago
  If you are referring to economists, the "experts" are not experts. Knowledge matters and is important, otherwise we go down the path of novax and flat earth crowds.
  - thowaway1122337 5y ago
    like novax and flat earth are equivalent gaslighter
- bell-cot 5y ago
  That public seems happy to be lied to, on all sorts of subjects, by politicians & salesmen & etc. Why should "the economy" and "economics experts" be special cases?
newaccount2021 5y ago
No, 100%, once inflation is undeniable, the Fed will be pressured to deflate by raising interest rates (and the "taper" talk is exactly the beginning of this and is expected before year's end). The asset bubble already happened, if you missed it by now, its too late to join.
raelmiu 5y ago
Preach.
hn_throwaway_99 5y ago
People love to say that, but it's actually supply slide shocks that are usually the primary culprit in inflation. The fed has been "helicoptering" money for years, but it has only been this year, when there have been real and substantial breakdowns in the supply chain and labor markets, than inflation spiked so much. Was the same with OPEC in the 70s, Zimbabwe, Weimar Germany - in all those cases there was a major destruction or restriction of supply capacity, not just money printing.
- nickik 5y ago
  This is mostly wrong. Weimar Germany for example was actually doing well economically before they decided to print huge amounts of money for their foreign policy and that was for foreign policy reasons. In 2009 inflation actually collapsed for example and that was a supply side collapse far bigger then this year. > The fed has been "helicoptering" money for years They have also enacted major counter measures and the pure amount is no longer really a good description of policy. Around 2009 or 2010 they started paying interest on reserves. The CB has a number of tools.
  - MR4D 5y ago
    You’re right - “helicoptering” is no longer accurate - “airlifting” might be more appropriate. Remember, the Fed is buying $120,000,000,000 of bonds per month. That’s well beyond a helicopter’s capability!
    - nickik 5y ago
      It doesn't matter what the reserve is when the central bank has the power to prevent the movement of reserves in other ways. This is part of the complexity in modern central banking that people don't seem to understand. Many of the things you might have learn in school about how central banks operate are no longer the case. If cash actually flows depends on many factors.
  - ItsMonkk 5y ago
    Weimar Germany was a short squeeze on gold caused by the war debt. Germany printed money to buy gold, but the more they printed, the more gold cost. This was predicted by Keynes ahead of time.
kome 5y ago
This kind of inflation we are witnessing, it's not because too much money has been printed, but exactly because there is not enough money in circulation. It's not a monetary inflation, it's inflation created by scarcity, related to production halts (cost-push inflation https://en.wikipedia.org/wiki/Cost-push_inflation https://en.wikipedia.org/wiki/Cost-push_inflation). While all kinds of inflation have the same symptoms, it's not true that all kinds inflation has the same causes. And also the cure, it should be the right cure. Printing less money right now would be a huge mistake. But central bankers knows his very well.
- ur-whale 5y ago
  > This kind of inflation we are witnessing, it's not because too much money has been printed, but exactly because there is not enough money in circulation. Oh wow. Krugman, leave that body!
- hpoe 5y ago
  This only is true if you accept that additional money gets equally shared; however additional money benefits those with assets the most, whereas those with fewer assets (the middle and lower class) are punished in inflation as they are dependent upon income which often does not change in response to inflation. Or in other words, if I have multiple properties, stocks, investements etc, inflation is good for me because those things increase in value; however if the primary source of capital I have is a paycheck I get each week that I then have to immediately spend on housing, food, groceries, gas etc, inflation hurts me because my boss isn't going to raise my pay, meanwhile everything has gotten more expensive in the meantime, and if my boss does eventually give me a COL increase that will have lagged to the point the rest of the economy has already caught up with it. Pretending that inflation is good for debtors is like pretending that economically speaking we are all spherical cows in an airless frictionless vacuum.
  - mywittyname 5y ago
    Wages are rising fastest for low- and middle-income Americans. So they are benefiting from inflationary pressure. And to be quit honest, the elephant in the room that no one wants to address is that low and middle income people leaving their jobs for better ones are a contributor of the inflation we are seeing. The USA built an economy around cheap goods produced through exploitation both abroad and domestically. And these people are finally realizing that they can do better. The government cut off the inflow of immigrants who would replace these people in dangerous, low paying factory jobs, like meat packing.
HideousKojima 5y ago
Lead isn't a bad investment either.
- namelessoracle 5y ago
  Given the mass buyouts of bullets going on around the country lots of people seem to be agreeing with this statement.
lucozade 5y ago
You might be right but I doubt it. There's been QE of various forms for the last 12-13 years without this happening. But in the last 12 month energy prices have jumped 25% in the US. That's going to have both a direct and indirect impact on CPI inflation. There is still likely to be some underlying inflation, not attributable to energy prices, but it's only going to be a couple of percent. Now if your argument is that the energy price rise is a direct consequence of QE, I don't see the link. And it would need to explain why energy prices have gone ballistic everywhere else too. But there may be a link I'm not aware of.

quotemstr 5y ago

> Printing free money has consequences Yet the story we heard over and over from "experts" was that for some complicated theoretical reason exploding the money supply wouldn't cause inflation --- and then, after inflation became impossible to just ignore, that the inflation was due to complicated "supply chain hiccup" and would be "transitory". Whatever. Common sense is a real thing that exists. Expertise doesn't make someone correct: it just makes him knowledgeable. An expert under pressure to arrive at a false conclusion (often for political reasons) will use that knowledge to bamboozle you. The general public should think more critically and reflect on why they allowed motivated economic experts to tell them blatant (and not just in hindsight) lies about the consequences of running the money printer.

xadhominemx 5y ago
The spike in energy and commodity costs has way more to do with supply side dynamics. Upstream suppliers have been hesitant to add capacity because they can’t tell if the spike in demand is sustainable or just a snapback post-lockdown. And OPEC in particular is pressing their advantage when no bank wants to fund frackers that have over invested and then wiped out 3 or 4 times now. We are seeing this in many industries. Inflation hawks/ideologues have called 15 out of the past 0 hyperinflationary cycles and this one will be no different.
nickthemagicman 5y ago
"Trust the experts" has been the motto going around for a while now. It makes it easy to outsource your own critical thinking by letting the "experts" do it. The experts should just be one data point not THE SOURCE OF ULTIMATE TRUTH.
- jpgvm 5y ago
  If you aren't a doctor your "own critical thinking" will have little bearing on the correct treatment or prevention of a disease/illness/injury, doubly so for complex ailments for viruses, cancers and genetic diseases. Pretty much the same goes for civil engineering, particle physics and any other highly trained field that requires vast quantities of knowledge to even intuit probable outcomes. Why is economics any different? I don't believe it is, I would say economics falls into a similar bucket as weather science where there are always large unknowns that make broad predictions imprecise but that doesn't invalidate their expertise and ignoring it is definitely foolish. Experts are experts for a reason. If you could intuit all difficult problems as a layman we would have already advanced science far beyond where we currently stand.
  - quotemstr 5y ago
    Skepticism of medical practice isn't a stupid Steve-Jobs-like trust in woo over science. It's getting multiple opinions, reading the underlying papers, asking "does this explanation make sense?", and checking for obvious mistakes --- as medicine, like any other human endeavor, is full of human error. Plenty of people have found cures for their medical problems only after they kept doggedly pressing medical people for things that made sense and actually worked for them. Something didn't seem right to them, and they pulled and pulled at threads to find out what it was. You don't need a medical degree to do that: you just need a brain. It's gravely concerning to see hostility directed at people who tell others to think for themselves, question experts, and adopt a general attitude of informed skepticism. Too many people get genuinely offended when you indicate that you're going to do your own thinking and not just follow "experts". They bring out cliches like "experts are experts for a reason" and "look at this one guy who did something stupid" and neglect, or even suppress, the idea that we at all, each and every one of us, scientists of our lives and competent to make our own decisions and form our own opinions.
    - jpgvm 5y ago
      There is a big difference between thinking for ourselves and the sort of broad rejection of expertise we are seeing, especially in the US. In a vacuum, yes. Skepticism isn't just healthy, it's what powers science itself. However this isn't a vacuum and most people that "question the experts" aren't doing so in good-faith. Your ability to question an existing theory is proportional to your understanding the problem space itself and knowledge of the existing facts. Basically in order to question an expert realistically you need to be an expert yourself. This shouldn't be controversial, but for some reason it is. :/
bojangleslover 5y ago
The same experts who leave education and real estate, two things everybody wants, off the CPI
- mikeyouse 5y ago
  What? Both are included; https://www.bls.gov/cpi/factsheets/college-tuition.htm https://www.bls.gov/cpi/factsheets/college-tuition.htm https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-and-rent.pdf https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...
Spooky23 5y ago
> The general public should think more critically and reflect on why they allowed motivated economic experts to tell them blatant (and not just in hindsight) lies about the consequences of running the money printer. The reality of not taking action has consequences. The opening of the money floodgates in the 80s blunted the pain of the late 60s and 70s. The war economy of 2002- likewise dulled the lows.
titzer 5y ago
> motivated economic experts Pretty much all economics that you just casually hear about is going to be economics intentionally put in service of furthering the system of rich and powerful elites. It's just more propaganda pushed at you and has absolutely no relation to what is good for society, the average person, the longevity of our civilization, or the environment. It is, in short, sophisticated bullshit to let rich people keep getting richer and live like the leeches they are.
goodpoint 5y ago
If you are referring to economists, the "experts" are not experts. Knowledge matters and is important, otherwise we go down the path of novax and flat earth crowds.
- thowaway1122337 5y ago
  like novax and flat earth are equivalent gaslighter
bell-cot 5y ago
That public seems happy to be lied to, on all sorts of subjects, by politicians & salesmen & etc. Why should "the economy" and "economics experts" be special cases?

newaccount2021 5y ago

No, 100%, once inflation is undeniable, the Fed will be pressured to deflate by raising interest rates (and the "taper" talk is exactly the beginning of this and is expected before year's end). The asset bubble already happened, if you missed it by now, its too late to join.

raelmiu 5y ago

Preach.

hn_throwaway_99 5y ago

People love to say that, but it's actually supply slide shocks that are usually the primary culprit in inflation. The fed has been "helicoptering" money for years, but it has only been this year, when there have been real and substantial breakdowns in the supply chain and labor markets, than inflation spiked so much. Was the same with OPEC in the 70s, Zimbabwe, Weimar Germany - in all those cases there was a major destruction or restriction of supply capacity, not just money printing.

nickik 5y ago
This is mostly wrong. Weimar Germany for example was actually doing well economically before they decided to print huge amounts of money for their foreign policy and that was for foreign policy reasons. In 2009 inflation actually collapsed for example and that was a supply side collapse far bigger then this year. > The fed has been "helicoptering" money for years They have also enacted major counter measures and the pure amount is no longer really a good description of policy. Around 2009 or 2010 they started paying interest on reserves. The CB has a number of tools.
- MR4D 5y ago
  You’re right - “helicoptering” is no longer accurate - “airlifting” might be more appropriate. Remember, the Fed is buying $120,000,000,000 of bonds per month. That’s well beyond a helicopter’s capability!
  - nickik 5y ago
    It doesn't matter what the reserve is when the central bank has the power to prevent the movement of reserves in other ways. This is part of the complexity in modern central banking that people don't seem to understand. Many of the things you might have learn in school about how central banks operate are no longer the case. If cash actually flows depends on many factors.
- ItsMonkk 5y ago
  Weimar Germany was a short squeeze on gold caused by the war debt. Germany printed money to buy gold, but the more they printed, the more gold cost. This was predicted by Keynes ahead of time.

kome 5y ago

This kind of inflation we are witnessing, it's not because too much money has been printed, but exactly because there is not enough money in circulation. It's not a monetary inflation, it's inflation created by scarcity, related to production halts (cost-push inflation https://en.wikipedia.org/wiki/Cost-push_inflation https://en.wikipedia.org/wiki/Cost-push_inflation). While all kinds of inflation have the same symptoms, it's not true that all kinds inflation has the same causes. And also the cure, it should be the right cure. Printing less money right now would be a huge mistake. But central bankers knows his very well.

ur-whale 5y ago
> This kind of inflation we are witnessing, it's not because too much money has been printed, but exactly because there is not enough money in circulation. Oh wow. Krugman, leave that body!
hpoe 5y ago
This only is true if you accept that additional money gets equally shared; however additional money benefits those with assets the most, whereas those with fewer assets (the middle and lower class) are punished in inflation as they are dependent upon income which often does not change in response to inflation. Or in other words, if I have multiple properties, stocks, investements etc, inflation is good for me because those things increase in value; however if the primary source of capital I have is a paycheck I get each week that I then have to immediately spend on housing, food, groceries, gas etc, inflation hurts me because my boss isn't going to raise my pay, meanwhile everything has gotten more expensive in the meantime, and if my boss does eventually give me a COL increase that will have lagged to the point the rest of the economy has already caught up with it. Pretending that inflation is good for debtors is like pretending that economically speaking we are all spherical cows in an airless frictionless vacuum.
- mywittyname 5y ago
  Wages are rising fastest for low- and middle-income Americans. So they are benefiting from inflationary pressure. And to be quit honest, the elephant in the room that no one wants to address is that low and middle income people leaving their jobs for better ones are a contributor of the inflation we are seeing. The USA built an economy around cheap goods produced through exploitation both abroad and domestically. And these people are finally realizing that they can do better. The government cut off the inflow of immigrants who would replace these people in dangerous, low paying factory jobs, like meat packing.

HideousKojima 5y ago

Lead isn't a bad investment either.

namelessoracle 5y ago
Given the mass buyouts of bullets going on around the country lots of people seem to be agreeing with this statement.

lucozade 5y ago

You might be right but I doubt it. There's been QE of various forms for the last 12-13 years without this happening. But in the last 12 month energy prices have jumped 25% in the US. That's going to have both a direct and indirect impact on CPI inflation. There is still likely to be some underlying inflation, not attributable to energy prices, but it's only going to be a couple of percent. Now if your argument is that the energy price rise is a direct consequence of QE, I don't see the link. And it would need to explain why energy prices have gone ballistic everywhere else too. But there may be a link I'm not aware of.