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I think the answer to that question is close zero. The US economy doesn't need more liquidity, and is essentially maxed out. When you add large amounts of liqu
by s1artibartfast 2y ago
I think the answer to that question is close zero. The US economy doesn't need more liquidity, and is essentially maxed out.
When you add large amounts of liquidity, you get proportional inflation/devaluation destroying the money you have added.
Covid Stimulus and related inflation showed how they economy cant even handle hundreds of billions more liquidity in the hands of consumers, let alone tens of trillions. The worker productive capacity doesn't exist to make and sell more stuff, so stocks and real-estate soak up as much liquidity as they can, and inflation takes the rest.
If the money in circulation doubled tomorrow, I would expect rent and eggs to double as well, because there isnt actually more stuff. In this way, excess liquidity and associated inflation heavily favors holders of debt, equity, capital, and real-estate.
As a well off American, I expect I would be the winner. My house dollar value of my house and 401k would double, while my mortgage would stay the same.