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> No government will reduce the printing of money. It is just too convenient. It is like taxing more and more without getting much complaints. Well the Fed jus

> No government will reduce the printing of money. It is just too convenient. It is like taxing more and more without getting much complaints. Well the Fed just reduced the effective rate it was printing money quite substantially by switching to Quantitative Tightening and increasing rates. You could even argue that with QT, not only is the Fed no longer printing money, but they are taking money that was printed back out of circulation and effectively destroying it.

notch656a 4y ago
The only time I can think of that the fed continually contracted the money supply was during the great depression. Would be interesting to look at a monetary supply chart since the fed was founded (I think ~1913 or 1915?)
- hedora 4y ago
  Powell claims the Fed did this in the 1980's under Volker, and says it plans to do it again right now. This matches up with the double digit mortgage rates that were common back then.
  - notch656a 4y ago
    M2 supply was practically monotonically increasing from 1970-1990.
    - JumpCrisscross 4y ago
      > M2 supply was practically monotonically increasing from 1970-1990 This is correct [1]. The American economy has grown, decade to decade, every decade of its existence. If the economy grows and the money supply does not, bad things happen [1] https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL
      - kshacker 4y ago
        1. A bad graph. I know it is an government website and not something you produced, I need to call it out. From 1970 to 1980, the metric jumped to 300% (an increase of 200%). From 1980 to 1990, the metric jumped to 210% (an increase of 110%). Whereas from 2010 to 2020 (just before covid), the metric jumped about to about 190% (an increase of 90%). But this is not obvious on the graph. They should use log scale. 2. The covid jump is something else. But I can understand why they spent money then. (Even from 1960s to 1970s they went up by 100% or to 200%, so I buy your point, just do not like the FRed's visualization) Edit: Just plotted these in Excel. Bush-1 and Clinton-1 were the only years with flat curve on logarithmic basis, every other era is a gradual increase.
        kshacker 4y ago
        Not sure if imgur is allowed so adding an image as a separate comment: https://imgur.com/8ordbZp https://imgur.com/8ordbZp I plotted the growth of the above mentioned data, and I compared each value with its value exactly 4 years back. So I compared Jan 1, 2022 with Jan 1, 2018. The idea is to see if there are trends based on presidential terms or crises. Since the data is still plotted monthly, you can pick and choose an arbitrary start date - some people say it takes time for presidencies to show results, so whatever yardstick you use, use it for all. Rest: see for yourself as long as these links are allowed :(
        aeternum 4y ago
        M2/GDP is probably more interesting. By that measure things are still quite high vs. historical but has dropped in the last 3 quarters: https://fred.stlouisfed.org/graph/?g=TdVJ https://fred.stlouisfed.org/graph/?g=TdVJ
ephbit 4y ago
> Well the Fed just reduced the effective rate it was printing money quite substantially by switching to Quantitative Tightening and increasing rates. Currently they are tightening, yes. Let's see how long they'll keep this up when not only the US but also Europe and China are caught up in this recession that's currently lurking. I say we're just seeing a short intermezzo of expensive money that'll soon be over again (no later than 3 years from now) when the world is going to be hit by crisis after crisis that politicians prefer to solve with yet more money.

notch656a 4y ago

The only time I can think of that the fed continually contracted the money supply was during the great depression. Would be interesting to look at a monetary supply chart since the fed was founded (I think ~1913 or 1915?)

hedora 4y ago
Powell claims the Fed did this in the 1980's under Volker, and says it plans to do it again right now. This matches up with the double digit mortgage rates that were common back then.
- notch656a 4y ago
  M2 supply was practically monotonically increasing from 1970-1990.
  - JumpCrisscross 4y ago
    > M2 supply was practically monotonically increasing from 1970-1990 This is correct [1]. The American economy has grown, decade to decade, every decade of its existence. If the economy grows and the money supply does not, bad things happen [1] https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL
    - kshacker 4y ago
      1. A bad graph. I know it is an government website and not something you produced, I need to call it out. From 1970 to 1980, the metric jumped to 300% (an increase of 200%). From 1980 to 1990, the metric jumped to 210% (an increase of 110%). Whereas from 2010 to 2020 (just before covid), the metric jumped about to about 190% (an increase of 90%). But this is not obvious on the graph. They should use log scale. 2. The covid jump is something else. But I can understand why they spent money then. (Even from 1960s to 1970s they went up by 100% or to 200%, so I buy your point, just do not like the FRed's visualization) Edit: Just plotted these in Excel. Bush-1 and Clinton-1 were the only years with flat curve on logarithmic basis, every other era is a gradual increase.
      - kshacker 4y ago
        Not sure if imgur is allowed so adding an image as a separate comment: https://imgur.com/8ordbZp https://imgur.com/8ordbZp I plotted the growth of the above mentioned data, and I compared each value with its value exactly 4 years back. So I compared Jan 1, 2022 with Jan 1, 2018. The idea is to see if there are trends based on presidential terms or crises. Since the data is still plotted monthly, you can pick and choose an arbitrary start date - some people say it takes time for presidencies to show results, so whatever yardstick you use, use it for all. Rest: see for yourself as long as these links are allowed :(
      - aeternum 4y ago
        M2/GDP is probably more interesting. By that measure things are still quite high vs. historical but has dropped in the last 3 quarters: https://fred.stlouisfed.org/graph/?g=TdVJ https://fred.stlouisfed.org/graph/?g=TdVJ

ephbit 4y ago

> Well the Fed just reduced the effective rate it was printing money quite substantially by switching to Quantitative Tightening and increasing rates. Currently they are tightening, yes. Let's see how long they'll keep this up when not only the US but also Europe and China are caught up in this recession that's currently lurking. I say we're just seeing a short intermezzo of expensive money that'll soon be over again (no later than 3 years from now) when the world is going to be hit by crisis after crisis that politicians prefer to solve with yet more money.