3 ms·

Spoiler - we didn’t print nearly as much as you think we did. And we generally haven’t even scratched the surface of how much more a normal growth of the curren

Spoiler - we didn’t print nearly as much as you think we did. And we generally haven’t even scratched the surface of how much more a normal growth of the currency since 2008 was needed. What are you talking about? Aside from the indoctrinated belief that money printing is good and normal, in the past 2 years alone the US has printed nearly 80% of USD in existence. Our debt to GDP is over 130%. If by “normal” you mean debasing and destroying the government money just like every empire before, sure.

danielschonfeld 4y ago
> in the past 2 years alone the US has printed nearly 80% of USD in existence Often cited and incorrect metric. The fed changed how the count M2 I believe because they started paying interest on reserves during their response to the COVID crisis. Either way the chart often cited showing an increase in M2 is not telling the whole story, namely that not nearly enough USD has been “printed” to satisfy world hunger and needs. (Think, if dollar was a plenty then why is DXY at the close to the second highest in history. Demand outpaces supply.) You can Google it. Have fun! While you’re at it also Google Triffin Paradox. Read about trade deficits as they relate to a country who’s currency is a global reserve currency.
- lossolo 4y ago
  > Read about trade deficits as they relate to a country who’s currency is a global reserve currency. US has around 1 trillion USD trade deficit every year, that money needs to come from somewhere and GDP seems to go up every year. US also has budget deficit of around 1-1.4 trillion USD per year. So US is also printing 1.4 trillion to finance the budget. So we are at around -2 trillion USD every year with debt of around 130% GDP. Seems like the rest of the world is financing that debt? Or how does it work?
  - danielschonfeld 4y ago
    I am no money master but I’ll take a shallow stab at it. Triffin explains the trade deficit perfectly. I’ll quote from Wikipedia: “…that the country whose currency, being the global reserve currency, foreign nations wish to hold, must be willing to supply the world with an extra supply of its currency to fulfil world demand for these foreign exchange reserves, leading to a trade deficit.” We basically have to keep feeding the world with dollars. Or at least collateral that can be trusted to be turned into dollars so that banks around the world can create those dollars. How? Create more government debt. The part about debt to GDP growth is I think exactly that problem of balancing your domestic short term needs vs the long term needs of the currency on a global scale. When the world is starved for dollars and the dollar becomes stronger this isn’t a measure of US economic strength it’s a measure of how much the system is choked. Less dollars to go around less global trade is able to function less goods and services produced all around. In a globalized system if one country isn’t able to produce as much (think China), the effects ripple to all countries like dominos. Causing secondary and tertiary effects further down the chain.
hnews_account_1 4y ago
This is incorrect. The usd in existence are just reserves. They are not actual spendable money beyond circulating somewhere inside the plumbings of global banking. Said plumbings are things even experts do not fully grasp so I’ll assume no one on this forum has read and understood it. Money did not enter the economy at the same rate it was printed. This is why all the money velocity charts are only shared by charlatans on finance twitter who mostly haven’t spent more than a few years at a serious desk before thinking they understood everything and took off. If you remained inside a high earning position with that level of knowledge, they’d get rid of you really fucking quickly.

danielschonfeld 4y ago

> in the past 2 years alone the US has printed nearly 80% of USD in existence Often cited and incorrect metric. The fed changed how the count M2 I believe because they started paying interest on reserves during their response to the COVID crisis. Either way the chart often cited showing an increase in M2 is not telling the whole story, namely that not nearly enough USD has been “printed” to satisfy world hunger and needs. (Think, if dollar was a plenty then why is DXY at the close to the second highest in history. Demand outpaces supply.) You can Google it. Have fun! While you’re at it also Google Triffin Paradox. Read about trade deficits as they relate to a country who’s currency is a global reserve currency.

lossolo 4y ago
> Read about trade deficits as they relate to a country who’s currency is a global reserve currency. US has around 1 trillion USD trade deficit every year, that money needs to come from somewhere and GDP seems to go up every year. US also has budget deficit of around 1-1.4 trillion USD per year. So US is also printing 1.4 trillion to finance the budget. So we are at around -2 trillion USD every year with debt of around 130% GDP. Seems like the rest of the world is financing that debt? Or how does it work?
- danielschonfeld 4y ago
  I am no money master but I’ll take a shallow stab at it. Triffin explains the trade deficit perfectly. I’ll quote from Wikipedia: “…that the country whose currency, being the global reserve currency, foreign nations wish to hold, must be willing to supply the world with an extra supply of its currency to fulfil world demand for these foreign exchange reserves, leading to a trade deficit.” We basically have to keep feeding the world with dollars. Or at least collateral that can be trusted to be turned into dollars so that banks around the world can create those dollars. How? Create more government debt. The part about debt to GDP growth is I think exactly that problem of balancing your domestic short term needs vs the long term needs of the currency on a global scale. When the world is starved for dollars and the dollar becomes stronger this isn’t a measure of US economic strength it’s a measure of how much the system is choked. Less dollars to go around less global trade is able to function less goods and services produced all around. In a globalized system if one country isn’t able to produce as much (think China), the effects ripple to all countries like dominos. Causing secondary and tertiary effects further down the chain.

hnews_account_1 4y ago

This is incorrect. The usd in existence are just reserves. They are not actual spendable money beyond circulating somewhere inside the plumbings of global banking. Said plumbings are things even experts do not fully grasp so I’ll assume no one on this forum has read and understood it. Money did not enter the economy at the same rate it was printed. This is why all the money velocity charts are only shared by charlatans on finance twitter who mostly haven’t spent more than a few years at a serious desk before thinking they understood everything and took off. If you remained inside a high earning position with that level of knowledge, they’d get rid of you really fucking quickly.