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The problem is that supposedly, since 2020, the Fed has printed somewhere between 40-80% of all dollars in existence (The M1). So my question is, if there is t
by oceanplexian 4y ago
The problem is that supposedly, since 2020, the Fed has printed somewhere between 40-80% of all dollars in existence (The M1).
So my question is, if there is twice as much money in the system, but the same number of assets, why would it be shocking that housing continues to inflate?
- nwiswell 4y agoM1 is a useful tool to understand why the prices of consumer goods have increased but not at all useful to understand home buying power. People regularly sell stocks, bonds, and other homes in order to produce the down payment for a mortgage and have done so since long before 2020. M1 does not measure any of these.
- majormajor 4y agoThe set of homebuyers and the set of stimulus recipients in a lot of these markets are non-overlapping, too. Crypto, on the other hand, is something I know was sold for a downpayment by several of my acquaintances, which is acting as its own form of "money supply increase" since they spent orders of magnitude less to acquire it. The anti-inflation tool creates its own inflation by turning into "new money." :)
- vkou 4y agoThe fed doesn't generally produce most of the dollars in existence, private lenders do by issuing mortgages (which creates money).