ItsMonkk

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481.
by ItsMonkk 6y ago
I recently came across this journal article[0]. Basically it outlines how getting off the gold standard leads to where we are today due to a cycle of.. 1. Economy isn't doing as well as we hoped. 2. Central banks lower the in
482.
by ItsMonkk 6y ago
> Assume doodads are $1 today. If tomorrow money supply is doubled, they will be $2. If you double every persons account, yes. If you do it through interest rates, you need to pay attention to the Cantillion Effect. The Cantillion Effect
483.
by ItsMonkk 6y ago
You can't just put it into the market. There are two sides to every transaction. You give money, they give stock, they get money, you get stock. When more money enters the economy than stuff is created, the price that the person willin
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by ItsMonkk 6y ago
Sustainability. The M2 is growing because interest rates are dropping. But interest rates are at 0, so they can't drop anymore. So there is reason to believe that we can not sustain our current trajectory any longer.
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by ItsMonkk 6y ago
You don't just have to watch out for CPI inflation to be outpaced by productivity. The money supply needs to also outpace productivity if you want the same status quo. I've built up an intuition that the money supply should match
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by ItsMonkk 6y ago
So the way I see this going is in any of these scenarios 1. Negative rates. All pretext is lost. 2. Repeat of Japan. Government ends up owning half of the stock market. 3. Mild to extreme bottom-up during a planned crash of assets. In this
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by ItsMonkk 6y ago
The 30 year rate has been dropping at 2% every decade for the last 5 decades at a steady rate[0]. If the fed attempts to taper inflation by increasing the interest rate above the 30 year, we will hit a yield curve inversion and trigger anot
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by ItsMonkk 6y ago
One company(like Apple) negates thousands of small companies. There are many large companies like Apple. The Market Cap of the S&P 500 is up $4 trillion. All of those bonds went straight into the market. Why not just show me the increas
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by ItsMonkk 6y ago
> highest-profile recent example of borrowing for buybacks: > Apple (ticker: AAPL). The tech giant sold $14 billion in bonds this month, and said it would use at least part of the proceeds on buybacks and dividends.[0] Kinda problema
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by ItsMonkk 6y ago
1. When the money supply is increasing at a rate faster than stuff, the best use of capital is to hoard it. Can you show me examples of major companies issuing stock right now? Looks to me like they are all buying back their stock, which ha
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by ItsMonkk 6y ago
This is an inaccurate narrative. The more wealth inequality there is in a nation, the less that increases in the money supply effect the economy. This is why we have no inflation with trillions injected. The rich simply store the money in a
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by ItsMonkk 6y ago
This is exactly how I take it. We thought it was Capitalism vs Communism, but what we learned is you can have Centralized Communism(Cold War Russia) and Decentralized Capitalism(Cold War USA) but it is just as much possible to have Decentra
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by ItsMonkk 6y ago
Thank you. The 1960's is a fascinating decade to me for the economy because everything turned out backward to what was expected and it seems that nobody learned anything from it. Check the statistics in the 1960s. Inflation was out of
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by ItsMonkk 6y ago
Yep, people keep conflating growth of the money supply should lead to rising CPI inflation. But money isn't neutral, you need to pay attention to the Cantillion Effect. When money enters into the economy through the wealthy, they buy s
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by ItsMonkk 6y ago
And notably the 40% number has not changed since 1990, as [0] shows. But it's misleading. As the OP showed, median housing prices is determined by the amount the median income can afford a house based on the interest rates. This means
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by ItsMonkk 6y ago
If you have a constantly increasing money supply, everyone's goal is to spend as little as possible on their day to day costs(which is what the CPI tracks), and squirrel away as much as possible in assets. The net effect this has had o
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by ItsMonkk 6y ago
Cantillion Effect. The closer you are to spending new money created through lowered interest rates, the more you benefit. 2021 marks the end of the 50 year interest rate dropping cycle starting in 1971 with the end of the gold standard, now
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by ItsMonkk 6y ago
Neutral money is the spherical cow of economics, and it isn't correct. You need to take into effect the Cantillion effect. The only way we would getting meaningful CPI inflation is if the new money was going to people who would increas
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by ItsMonkk 6y ago
I'm saddened to see that while this post isn't down-voted, it is not the most up-voted post that it deserves to be so. I expect this to be because most people don't know what the Cantillion Effect is, so this post will attemp