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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 polic
by 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 agoYou’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 agoIt 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 agoWeimar 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.
- nickik 5y agoThat was a policy decision, not a necessary decision. They printed money to pay workers in Rhineland and because it was a calibrate choice by them in order to force a revision WW1 settlement.