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You miss the key point on why this is happening and will continue to get significantly worse. What happens when the number of dollars approximately doubles in
by kerng 5y ago
You miss the key point on why this is happening and will continue to get significantly worse.
What happens when the number of dollars approximately doubles in 2 years as it happened?
Do you think prices stay the same and everything is just 50% off?
Reality is that the current number is off by reality quite a bit, real number has to be much higher. It's just math and the worst part... it can't be just reversed.
- dubcanada 5y agoI have no idea what you are saying. Also what is "just math" and why can't it be reversed? Inflation can go down, it's not a purely up percentage, you can have negative inflation. What do you mean by "number of dollars approximately doubles in 2"?
- hartator 5y ago> What do you mean by "number of dollars approximately doubles in 2"? I think OP was talking about monetary inflation. We nearly double the money supply so it should translate to a nearly double price inflation.
- dlp211 5y agoThat is not how inflation works.
- hartator 5y agoAll thing being equal. 2x monetary supply should translate to 2x price inflation. It’s literally how inflation work. The reason we don’t have that’s crazy inflation is not everything is equal. Mostly at natural the economy should deflate right now.
- abeppu 5y agoYou can have negative inflation, but don't central banks work really hard to avoid that because (the theory goes) deflation will kill spending?
- boringg 5y agoWe haven't doubled the money supply (not even close). The amount of misinformation in this conversation in the general public speaks to the lack of understanding of our monetary systems.
- throwawaygh 5y agoIt's not a lack of understanding. There are multiple incredibly strong propaganda machines, both political (R) and business (crypto), pushing this narrative.
- kerng 5y agoSo how much has the money supply increased/decreased according to your sources?
- srj 5y agoYou're the one who made the assertion - curious on your sources. If you're simply looking at fiscal stimulus spending that's a pretty naive view of economics.
- kerng 5y agohttps://tradingeconomics.com/united-states/money-supply-m0 https://tradingeconomics.com/united-states/money-supply-m0 Look at 5 year view.
- jjk166 5y agoLook at the 25 year view. 2014-2019 was an anomaly where us GDP grew 22% while the money supply contracted by 25%, we are currently back to the straight line we've been on since 2008.
- blagie 5y agoI'm not sure that's the worst part. I predicted about 2x inflation as a best-case outcome a year ago. Worst-case outcome would have been serious structural damage, in terms of business bankruptcies, lost jobs, lost mortgages, etc. Unless we get into a hyperinflationary cycle, we came out pretty well, economically. Our public health response, on the other hand, was and continues to be a disaster.
- boringg 5y agoFWIW: Narrow money - (cash, deposits, savings account) over $40 trillion of USD. $90 Trillion in broad money. $1.3 quadrillion including investments, crypto, derivatives.
- wbsss4412 5y agoSetting aside my other issues with this analysis, this is just flat out incorrect: > it can’t just be reversed I don’t know where you’ve gotten this idea from. The fed can destroy money just the same as it can create it.
- kerng 5y agoThat's an interesting point, has that ever been done?
- wbsss4412 5y agoThe fed was in the process of lowering its balance sheet pre pandemic. You only have to look back to 2019. [1] [1] https://www.investopedia.com/the-fed-continues-to-reduce-its-balance-sheet-4628158 https://www.investopedia.com/the-fed-continues-to-reduce-its...
- deleted 5y ago[deleted]
- mywittyname 5y ago> What happens when the number of dollars approximately doubles in 2 years as it happened? Do you think countries that don't use the USD will remain unaffected? People keep blaming this on the fed "printing money", but that logic only holds water when just the USA is affected. Everyone is experiencing inflation; it's a global phenomenon. Some countries have it even worse than the USA because their local production is getting redirected to the USA, where even higher prices will be paid. In two years, things will very likely cool down globally.
- option_greek 5y agoThe money fed prints doesn't stay in USA. It floods the entire globe trying to find the maximum return it can. That is the reason all stock markets everywhere are at record highs and commodities are continuing to push upward. As more economies are getting heated, many have started raising their own interest rates to reduce inflation.
- mywittyname 5y agoAt some point, we need to accept that The Fed is not God of the World Economy. They can have a major impact on the country's economy, and they can influence foreign markets to a degree, but they are not responsible for everything. They just don't have that kind of power. If commodity inflation is caused by an over abundance of USD, then there would be a whole host of side effects from this. One of which, is as I said, price inflation localized to the USA. The second would be a weakening of USD relative to most other strong currencies. So let's look at that: USD : Euro - Slightly weaker relative to 2020, but overall, right around the average strength over the past ten years. USD : GBP - Same as the Euro. USD : CAD|SGD|AUD - Weaker than 2019, but much stronger than the 10 year average. USD : JPY|INR - Very strong USD : CNY - much weaker than 2019, better than 2018, right about at the 10 year average. It's there, but only slightly. And only after 2-3 years of crazy strengthening.
- option_greek 5y agoThe USD vs other currencies cannot be compared to USD vs commodities which paint a more transparent picture because no one wants their own currency to be stronger than USD due to export competitiveness getting effected. So whenever USD goes down, they buy more USD with their own currency to keep the peg contained in a range. I know all are supposedly free floats central banks do buy and sell to contain volatility. So the thing that needs to be watched is not the ratio of currency but the USD denominated forex levels which as per my understanding have raised across the board as capital leaves US shoes to these countries. I don't have data to back it up but at least in non tourism dependent economies it is the case.
- anonymouse008 5y ago> Reality is that the current number is off by reality quite a bit, real number has to be much higher. It's just math and the worst part... it can't be just reversed. I am now starting to wonder if the unrealized gains tax is the 'reversal' and the interdemensional checkmate on hidden wealth.
- WarOnPrivacy 5y agoAre you recommending the world spend a bit of it's hoarded wealth, to allow less money to be printed? You're a monster.
- ignasheahy 5y agoAre you saying rich and powerful have grandpa checking bank accounts and just refuse to spend it? They are owning real estate, land, companies, resources - that's where their wealth it. In high inflation scenario current wealth gap will look like good old times... Slight inflation is good, but high inflation will be troubling to a lot of regular people.