3 ms·
No PHD needed, just a ruler. https://tradingeconomics.com/united-states/money-supply-m2 https://tradingeconomics.com/united-states/money-supply-m2 Switch to 1
by incomingpain 4y ago
No PHD needed, just a ruler.
https://tradingeconomics.com/united-states/money-supply-m2 https://tradingeconomics.com/united-states/money-supply-m2
Switch to 10 Year view. Put your ruler on the line. You should get a bit under 18,000.
It's actually 22,000. So pretty simple maths. It's 22% inflation from simple 'printed too much money'. This is monetary policy gone wrong. Though if you zoom it, they did stop printing money and have been pulling out a minuscule amount in the last few months.
So there's 22% inflation just from monetary policy. Then you have inflation from various other sources like cancelling oil projects causing supply issues. You have carbon taxes causing pretty big harm to the food industry. Afterall I'm not familiar with any combine harvesters or tractors that get good mileage. Long story short, there's about 40% inflation locked in. If it doesnt rise above 9.1%, then it's years more of this.
- aaronax 4y agoOne would want a log scale on the vertical axis, right?
- incomingpain 4y agoIt's relative to population growth and an artificial inflation rate funding the government. They matched the natural gold inflation due to mining. The line I was pointing out was totally fine pre-2009. Not the case anymore.
- galangalalgol 4y agoWhat is the primary way to remove the extra money? Higher rates? If so that seems like its taking a bit of money from everyone that needs more money than they have, whether that is to buy a house, start a business, or... Is there some way to remove the extra money from those who has more money than they need instead?
- tmountain 4y agoNormal Operations consist of (mainly) controlling the interest rate at which a central bank will pay out on reserves (cash / assets) that other banks deposit in it. This is known as the base rate / reserve rate, and varying this rate can vary the reserves at the central bank, and therefore the money in the economy.
- tmountain 4y agoSo, what should the average retail investor do about it?
- incomingpain 4y agoI think you're looking at it the wrong way. Currency devaluation isn't about your investing. It's about trying to earn that small money in the first place. Don't focus on your passive investment, but rather how you are producing the money to get into that investment.
- Omie6541 4y agoThanks for this, today I learnt something new. Compared this to China, Germany and India - neither of these countries have weird graph as USA!