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It is always the same cycle. They FED increase the balance out of thin air by massive quantitative easing. If the money reaches the public, unlike 2008 when it
by electroagenda 4y ago
It is always the same cycle.
They FED increase the balance out of thin air by massive quantitative easing. If the money reaches the public, unlike 2008 when it only covered holes, inflation arises.
Then they need to create a recession, by increasing interest rates, to solve inflation.
And then they need to lower those rates to get out of the recession. And we go back to the first point.
Simple.
- seanw444 4y agoSounds like unnecessary bureaucracy on top of an inherit cycle to me.
- simple-thoughts 4y agoNot quite . The banking system naturally creates new money during booms and destroys it during busts. In theory, the federal reserve is supposed to act as a counterweight leading to stability. In practice, it usually accentuates those trends due to political pressure - during bull markets like 2009 thru 2021, people think it’s a new normal and money printing even more is ok. Meanwhile consumer inflation stays low because everyone is putting money into assets that are going up exponentially.
- naveen99 4y agoThink about how your confidence in yourself affects your future earnings expectation and your willingness to take on debt or pay it off. that confidence can change over night due to internal and external factors. So you yourself also create and destroy money with your changing confidence.