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how do you explain the fact that gazillions were printed for decades without much meaningful inflation? japan being the printiest of them all having had the lea

by bedobi 3y ago

how do you explain the fact that gazillions were printed for decades without much meaningful inflation? japan being the printiest of them all having had the least inflation of all crickets huh

the_gastropod 3y ago
As a rule of thumb, it's safe to assume anyone who complains generically about "money printing" doesn't actually have a rational point. They're generally hand-waving broadly, suggesting some John Birch Society type of inflation conspiracy.
- horsawlarway 3y ago
  I know right - it's certainly not like that Paul Volcker fella has any fucking clue what he's talking about. --- To quote the man himself, when referring to how he was going to solve inflation: "But none of these policies, important as they are, can substitute for commitments to fiscal prudence and restraint on the money supply."
  - the_gastropod 3y ago
    This isn't to suggest money supply has no impact on inflation—of course it does. There's a reason Powell increased interest rates, after all. But the simplistic "MONEY PRINTER GO BRRR INFLATION LUL" meme can generally be chalked up to belief in conspiracy-theory nonsense.
    - mrguyorama 3y ago
      > can generally be chalked up to belief in conspiracy-theory nonsense. Or worse, watching a few "economics" youtube videos and thinking you understand how the world works. Surely we should just go back to the gold standard! That didn't have regular destructive and unavoidable problems all the damn time!
    - horsawlarway 3y ago
      I think you're basically saying "yes - of course there's an elephant in the room, but if you just look past the elephant at the larger picture..." And to be clear - I completely agree with you that there is a larger picture, and we had a very interesting test of what just-in-time supply chains looked like during global crisis, and we're now seeing all sorts of trends that we don't have good insight on. But also... that elephant is still there. Running the money printer hot and heavy for a few years is almost certainly a major driver for inflation, even if the timing of that inflation can be very hard to predict (markets are absolutely not rational actors) and even if we know there are confounding factors.
    - LudwigNagasena 3y ago
      Ah, the ol’ good tactic of taking a straightforward statement, calling it a dog whistle and dismissing it.
      - the_gastropod 3y ago
        As a straight forward statement, it’s reductive malarkey. The Fed, in no way, prints money. When people use that phrase, it’s almost always a good sign they have no idea how money works.
        LudwigNagasena 3y ago
        Of course the Fed prints money (and no, it is not the Bureau of Engraving and Printing). It seems that it's you who is actually confused how money works.
        horsawlarway 3y ago
        No comment in this chain implied the fed printed money except yours. So lets cut the crap - you are engaging in reductive malarkey right now. It's a complete non-sequitur to the conversation at hand (that printing money causes inflation) and frankly, based on your comments - I'm fairly certain you have no clue what you're talking about at this point. Does the fed directly print money - no, the treasury does. Does the fed control the supply of money? Yes, yes they fucking do. The fed is the one placing orders for the money that the treasury prints, and they control how that money enters the market (honestly - not so much through physical supply anymore, it's mostly digital these days).
        the_gastropod 3y ago
        Again, you’re over-simplifying this. Money creation / destruction is not that simple. There are several ways the money supply can expand. Primarily, banks expand the money supply. The Fed (often) buys treasury bonds on an open exchange, allowing banks to make loans, expanding the money supply. Sometimes, the Fed “PRINTS MONEY!!” to decrease the money supply, by increasing the interest rate on reserve balances (IORB). The Fed, obviously plays the central role in this. But I’d estimate, thanks to the wonderful past ~decade of anti-fiat crypto enthusiasm, the vast majority of “money printer” claims like we see up thread (by a user with a cryptocurrency-inspired username mind you) think the Fed literally just prints money, and that causes inflation.
- bedobi 3y ago
  Welcome to HackerNews! Threads about Medicine and Economics are some of the best - everyone here is apparently a Nobel grade expert. They don't know first thing about any of it but you see they know how to code so their overinflated ego, belief in their superior intellect, and ability to know better than and disrupt other fields is all they need! Now just wait for someone to point out that the Nobel in Economics isn't actually a Nobel, sigh
soperj 3y ago
They hadn't even hit a trillion in 2010. Since then they've printed 1.3 trillion. 500 billion in the 3 years. I think the amount matters.
- deleted 3y ago
  [deleted]
mypastself 3y ago
The same way supporters of the greedflation hypothesis defend their position on corporate greed: by claiming it increased substantially in recent years. Except the money printing hypothesis champions have more convincing data.
- bedobi 3y ago
  > the money printing hypothesis champions have more convincing data they really don't though, that's the point. they've been screaming that all the "money printing" is going to cause hyperinflation any day now for decades. eventually yeah we got some inflation, even a broken clock is right twice a day. their ideas have zero explanatory power. (if they did, how come we didn't get hYpErInFlaTioN decades ago, and STILL don't have it today?)
  - mypastself 3y ago
    Money printing increased significantly in the past few years, as did inflation. Taking the most extreme version of the argument and using inconsistent capitalization when quoting it doesn’t stop inflation from being a monetary phenomenon.
space_fountain 3y ago
I mean something unusual definitely happened in the US https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL. Is the alternative that companies suddenly discovered they were greedy? edit: though I do want to add the m2 supply might be more important here, and it doesn't show anything as dramatic https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL. https://fredblog.stlouisfed.org/2021/01/whats-behind-the-recent-surge-in-the-m1-money-supply/ https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec...
- HDThoreaun 3y ago
  They changed the definition of m1 which is the cause of that spike. M2 is definitely the better metric.
  - space_fountain 3y ago
    I did notice that change, but then the article didn’t mention it? Do you have a source for the change being responsible for the spike? The timing is suspicious, but the fed appears to be trying to bring the money supply back in line with the trend from before the spike
Titanicpryk 3y ago
https://www.weforum.org/agenda/2022/10/why-japan-low-inflation/ https://www.weforum.org/agenda/2022/10/why-japan-low-inflati... According to this Japan has more price controls. Also seeing that an aging populace has lowered demand. Do recessions tend to drive inflation? Do you print more money hoping to stimulate out of a recession?
itsoktocry 3y ago
>how do you explain the fact that gazillions were printed for decades without much meaningful inflation? The amount of money printed since 2020 was literally unprecedented. Look at the M1 chart: https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL >crickets huh Japan has the highest levels of inflation they've seen in over 40 years.
- bedobi 3y ago
  the spike on the m1 chart is not due to to inflation the conspiracy theorists and armchair economists have been screaming that all the "money printing" is going to cause hyperinflation any day now for decades. eventually yeah we got some inflation, even a broken clock is right twice a day. their ideas have zero explanatory power. if they did, how come we (and especially Japan) didn't get hYpErInFlaTioN decades ago, and STILL don't have it today?
derf_ 3y ago
The best explanation I heard after the great financial crisis (i.e., not recently) was that during that crisis, the Japanese bubble economy of the 80's, and to a lesser extent the dot com crash, huge amounts of credit (marked to market) were destroyed. If you look at the total supply of money and credit marked to market, there was not much, if any, increase. That was not true of the pandemic.
- marcosdumay 3y ago
  Yep. Since the 80's up to the 10's Japan has printed almost enough to cover for the reduction on private credits, just a bit less, so they got deflation. I believe this is a well accepted thing, with basically everybody that accepts that private credits are impactful enough to be important accepting it (what is not universal, but nobody else has an explanation). The lack of inflation on the US between 08 and 20 is much harder to explain.
refurb 3y ago
Look at excess reserves at the Fed. https://fred.stlouisfed.org/series/EXCSRESNS https://fred.stlouisfed.org/series/EXCSRESNS 2.8T dollars being held at the Fed. It never entered circulation.

by bedobi 3y ago

how do you explain the fact that gazillions were printed for decades without much meaningful inflation? japan being the printiest of them all having had the least inflation of all crickets huh

the_gastropod 3y ago

As a rule of thumb, it's safe to assume anyone who complains generically about "money printing" doesn't actually have a rational point. They're generally hand-waving broadly, suggesting some John Birch Society type of inflation conspiracy.

horsawlarway 3y ago
I know right - it's certainly not like that Paul Volcker fella has any fucking clue what he's talking about. --- To quote the man himself, when referring to how he was going to solve inflation: "But none of these policies, important as they are, can substitute for commitments to fiscal prudence and restraint on the money supply."
- the_gastropod 3y ago
  This isn't to suggest money supply has no impact on inflation—of course it does. There's a reason Powell increased interest rates, after all. But the simplistic "MONEY PRINTER GO BRRR INFLATION LUL" meme can generally be chalked up to belief in conspiracy-theory nonsense.
  - mrguyorama 3y ago
    > can generally be chalked up to belief in conspiracy-theory nonsense. Or worse, watching a few "economics" youtube videos and thinking you understand how the world works. Surely we should just go back to the gold standard! That didn't have regular destructive and unavoidable problems all the damn time!
  - horsawlarway 3y ago
    I think you're basically saying "yes - of course there's an elephant in the room, but if you just look past the elephant at the larger picture..." And to be clear - I completely agree with you that there is a larger picture, and we had a very interesting test of what just-in-time supply chains looked like during global crisis, and we're now seeing all sorts of trends that we don't have good insight on. But also... that elephant is still there. Running the money printer hot and heavy for a few years is almost certainly a major driver for inflation, even if the timing of that inflation can be very hard to predict (markets are absolutely not rational actors) and even if we know there are confounding factors.
  - LudwigNagasena 3y ago
    Ah, the ol’ good tactic of taking a straightforward statement, calling it a dog whistle and dismissing it.
    - the_gastropod 3y ago
      As a straight forward statement, it’s reductive malarkey. The Fed, in no way, prints money. When people use that phrase, it’s almost always a good sign they have no idea how money works.
      - LudwigNagasena 3y ago
        Of course the Fed prints money (and no, it is not the Bureau of Engraving and Printing). It seems that it's you who is actually confused how money works.
      - horsawlarway 3y ago
        No comment in this chain implied the fed printed money except yours. So lets cut the crap - you are engaging in reductive malarkey right now. It's a complete non-sequitur to the conversation at hand (that printing money causes inflation) and frankly, based on your comments - I'm fairly certain you have no clue what you're talking about at this point. Does the fed directly print money - no, the treasury does. Does the fed control the supply of money? Yes, yes they fucking do. The fed is the one placing orders for the money that the treasury prints, and they control how that money enters the market (honestly - not so much through physical supply anymore, it's mostly digital these days).
        the_gastropod 3y ago
        Again, you’re over-simplifying this. Money creation / destruction is not that simple. There are several ways the money supply can expand. Primarily, banks expand the money supply. The Fed (often) buys treasury bonds on an open exchange, allowing banks to make loans, expanding the money supply. Sometimes, the Fed “PRINTS MONEY!!” to decrease the money supply, by increasing the interest rate on reserve balances (IORB). The Fed, obviously plays the central role in this. But I’d estimate, thanks to the wonderful past ~decade of anti-fiat crypto enthusiasm, the vast majority of “money printer” claims like we see up thread (by a user with a cryptocurrency-inspired username mind you) think the Fed literally just prints money, and that causes inflation.
bedobi 3y ago
Welcome to HackerNews! Threads about Medicine and Economics are some of the best - everyone here is apparently a Nobel grade expert. They don't know first thing about any of it but you see they know how to code so their overinflated ego, belief in their superior intellect, and ability to know better than and disrupt other fields is all they need! Now just wait for someone to point out that the Nobel in Economics isn't actually a Nobel, sigh

soperj 3y ago

They hadn't even hit a trillion in 2010. Since then they've printed 1.3 trillion. 500 billion in the 3 years. I think the amount matters.

deleted 3y ago
[deleted]

mypastself 3y ago

The same way supporters of the greedflation hypothesis defend their position on corporate greed: by claiming it increased substantially in recent years. Except the money printing hypothesis champions have more convincing data.

bedobi 3y ago
> the money printing hypothesis champions have more convincing data they really don't though, that's the point. they've been screaming that all the "money printing" is going to cause hyperinflation any day now for decades. eventually yeah we got some inflation, even a broken clock is right twice a day. their ideas have zero explanatory power. (if they did, how come we didn't get hYpErInFlaTioN decades ago, and STILL don't have it today?)
- mypastself 3y ago
  Money printing increased significantly in the past few years, as did inflation. Taking the most extreme version of the argument and using inconsistent capitalization when quoting it doesn’t stop inflation from being a monetary phenomenon.

space_fountain 3y ago

I mean something unusual definitely happened in the US https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL. Is the alternative that companies suddenly discovered they were greedy? edit: though I do want to add the m2 supply might be more important here, and it doesn't show anything as dramatic https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL. https://fredblog.stlouisfed.org/2021/01/whats-behind-the-recent-surge-in-the-m1-money-supply/ https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec...

HDThoreaun 3y ago
They changed the definition of m1 which is the cause of that spike. M2 is definitely the better metric.
- space_fountain 3y ago
  I did notice that change, but then the article didn’t mention it? Do you have a source for the change being responsible for the spike? The timing is suspicious, but the fed appears to be trying to bring the money supply back in line with the trend from before the spike

Titanicpryk 3y ago

https://www.weforum.org/agenda/2022/10/why-japan-low-inflation/ https://www.weforum.org/agenda/2022/10/why-japan-low-inflati... According to this Japan has more price controls. Also seeing that an aging populace has lowered demand. Do recessions tend to drive inflation? Do you print more money hoping to stimulate out of a recession?

itsoktocry 3y ago

>how do you explain the fact that gazillions were printed for decades without much meaningful inflation? The amount of money printed since 2020 was literally unprecedented. Look at the M1 chart: https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL >crickets huh Japan has the highest levels of inflation they've seen in over 40 years.

bedobi 3y ago
the spike on the m1 chart is not due to to inflation the conspiracy theorists and armchair economists have been screaming that all the "money printing" is going to cause hyperinflation any day now for decades. eventually yeah we got some inflation, even a broken clock is right twice a day. their ideas have zero explanatory power. if they did, how come we (and especially Japan) didn't get hYpErInFlaTioN decades ago, and STILL don't have it today?

derf_ 3y ago

The best explanation I heard after the great financial crisis (i.e., not recently) was that during that crisis, the Japanese bubble economy of the 80's, and to a lesser extent the dot com crash, huge amounts of credit (marked to market) were destroyed. If you look at the total supply of money and credit marked to market, there was not much, if any, increase. That was not true of the pandemic.

marcosdumay 3y ago
Yep. Since the 80's up to the 10's Japan has printed almost enough to cover for the reduction on private credits, just a bit less, so they got deflation. I believe this is a well accepted thing, with basically everybody that accepts that private credits are impactful enough to be important accepting it (what is not universal, but nobody else has an explanation). The lack of inflation on the US between 08 and 20 is much harder to explain.

refurb 3y ago

Look at excess reserves at the Fed. https://fred.stlouisfed.org/series/EXCSRESNS https://fred.stlouisfed.org/series/EXCSRESNS 2.8T dollars being held at the Fed. It never entered circulation.