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Yet no one in the mainstream is willing to admit that wild inflation was largely a result of out of control money printing. Usually, this leads to asset price r

by spaceman_2020 2y ago

Yet no one in the mainstream is willing to admit that wild inflation was largely a result of out of control money printing. Usually, this leads to asset price rise (which has outpaced inflation for decades now). But this time, there was so much money sloshing around that it pumped assets to prices that were beyond the market’s absorption (see home prices). Once there were no quality assets left to buy, the money found its way to garbage assets (NFTs, crypto) and consumption Admitting this would mean admitting that the foundations of the western capitalist system are weak. Little wonder why the blame is deflected to a million things, but NEVER money printing and esoteric money juju such as QE

lkafhg 2y ago
[flagged]
FabHK 2y ago
First, the increase in the McD burger price over those 7.5 years constitutes around 4% p.a. That's certainly not great, and twice the usual inflation target, but not catastrophic. Second, there was no "out-of-control" money printing in Australia, see [1]. Third, if there was out-of-control money printing (and there was some loose monetary policy, and at the zero lower bound this does involve expansion of the central bank balance sheet, ie QE), it was after the GFC in 2007 [2]. However, there was no inflation for a decade and a half after. But then, the pandemic and the Ukraine war hit. Now you had supply constraints (reduced production and logistics challenges) and also increased demand (due to fiscal easing (stimulus, subsidies) during the pandemic, and people "catching up" on spending afterwards). And then there was a short bout of inflation. Why do people keep complaining about money printing if that's not the cause for inflation? Fourth, you find extensive discussion of all these issues in utterly mainstream media. [1] Here's M1 and M3 for Australia (log scale). https://fred.stlouisfed.org/graph/?g=1riAu https://fred.stlouisfed.org/graph/?g=1riAu https://fred.stlouisfed.org/graph/?g=1riAC https://fred.stlouisfed.org/graph/?g=1riAC [2] US Fed Assets (log scale) https://fred.stlouisfed.org/graph/?g=1riAC https://fred.stlouisfed.org/graph/?g=1riAC
- spaceman_2020 2y ago
  Did you miss the part where I said that out of control money printing finds its place first in asset prices? Go look at the inflation in Australian home prices since 2008

lkafhg 2y ago

[flagged]

FabHK 2y ago

First, the increase in the McD burger price over those 7.5 years constitutes around 4% p.a. That's certainly not great, and twice the usual inflation target, but not catastrophic. Second, there was no "out-of-control" money printing in Australia, see [1]. Third, if there was out-of-control money printing (and there was some loose monetary policy, and at the zero lower bound this does involve expansion of the central bank balance sheet, ie QE), it was after the GFC in 2007 [2]. However, there was no inflation for a decade and a half after. But then, the pandemic and the Ukraine war hit. Now you had supply constraints (reduced production and logistics challenges) and also increased demand (due to fiscal easing (stimulus, subsidies) during the pandemic, and people "catching up" on spending afterwards). And then there was a short bout of inflation. Why do people keep complaining about money printing if that's not the cause for inflation? Fourth, you find extensive discussion of all these issues in utterly mainstream media. [1] Here's M1 and M3 for Australia (log scale). https://fred.stlouisfed.org/graph/?g=1riAu https://fred.stlouisfed.org/graph/?g=1riAu https://fred.stlouisfed.org/graph/?g=1riAC https://fred.stlouisfed.org/graph/?g=1riAC [2] US Fed Assets (log scale) https://fred.stlouisfed.org/graph/?g=1riAC https://fred.stlouisfed.org/graph/?g=1riAC

spaceman_2020 2y ago
Did you miss the part where I said that out of control money printing finds its place first in asset prices? Go look at the inflation in Australian home prices since 2008