Howcome US is printing money like crazy but there is no change in inflation? (borrowing, purchase)

[gwynedd1]

Originally Posted by jerseyexpat

Where is Mircea from?

Likely one who has bathed in the waters of Borsec.

[Hoonose]

Originally Posted by gwynedd1

Likely one who has bathed in the waters of Borsec.

Maybe you'll get a kick:

"Cathcart grinned. "He got the cash money the same way we
have gotten all cash money since Roosevelt put the gold back in
the ground-right off the printing presses. But he didn't have to
print much of it. The checks were issued at the Bank and the
merchant and a great many others had accounts at the Bank and
very little cash money changed hands. The bulk of it was mere
bookkeeping entries, made by the bank clerks. Holmes had
implemented what the bankers had known for centuries but
were barred by LaGuardia from doing-taking money out of an
inkwell. What's the matter, son? Still not satisfied?"
"Well, I don't know. Everything you have said seems okay,
but how about this? If you keep pouring money into a country
indefinitely, you are bound to get inflation, fixed prices or no
fixed prices."
"You don't pour it in. You add just enough to keep it running.
Each fiscal period the additional amount is the closest possible
approximation of the amount necessary to prevent a spread
between consumption and production, based on the value of the
nation's inventories."
"But why do you have to keep adding money all the time?"
"I said I would stay away from theory but I'll give you this
hint to chew over: the amount necessary to add each period is
theoretically equal to the amount of savings invested as capital in
the preceding period. And one more hint: Doesn't it take more
money to run the country's industry now than it did when
George Washington was President?"

Robert A. Heinlein 'For Us,The Living'
Written in 1934, not published until 2001.

London Banker: Testimony of Marriner Eccles to the Committee on the Investigation of Economic Problems in 1933

[shaker281]

Originally Posted by gwynedd1

Likely one who has bathed in the waters of Borsec.

A good guess!

[shaker281]

Originally Posted by Hoonose

Maybe you'll get a kick:

"Cathcart grinned. "He got the cash money the same way we
have gotten all cash money since Roosevelt put the gold back in
the ground-right off the printing presses. But he didn't have to
print much of it. The checks were issued at the Bank and the
merchant and a great many others had accounts at the Bank and
very little cash money changed hands. The bulk of it was mere
bookkeeping entries, made by the bank clerks. Holmes had
implemented what the bankers had known for centuries but
were barred by LaGuardia from doing-taking money out of an
inkwell. What's the matter, son? Still not satisfied?"
"Well, I don't know. Everything you have said seems okay,
but how about this? If you keep pouring money into a country
indefinitely, you are bound to get inflation, fixed prices or no
fixed prices."
"You don't pour it in. You add just enough to keep it running.
Each fiscal period the additional amount is the closest possible
approximation of the amount necessary to prevent a spread
between consumption and production, based on the value of the
nation's inventories."
"But why do you have to keep adding money all the time?"
"I said I would stay away from theory but I'll give you this
hint to chew over: the amount necessary to add each period is
theoretically equal to the amount of savings invested as capital in
the preceding period. And one more hint: Doesn't it take more
money to run the country's industry now than it did when
George Washington was President?"

Robert A. Heinlein 'For Us,The Living'
Written in 1934, not published until 2001.

London Banker: Testimony of Marriner Eccles to the Committee on the Investigation of Economic Problems in 1933

So, much truth and discovery to be found in works of SciFi authors! That is an interesting excerpt.

[shaker281]

Originally Posted by Hoonose

1) Imports are real gains. Our fiat, essentially created out of vapor, is exchanged for real stuff.
2) Our fiat helps run the world, and gives us great powers. It is backed by our productive output and security.
3) Energy independence will augment our security and help with our own productive output, giving more strength to our fiat. It should also help employ more of our own.

Precisely what I was getting at.

[shaker281]

Originally Posted by gwynedd1

Money isn't easy. Its an unstable equilibrium. It needs to be widely available, but retain its value. Those two are inversely related. Yes the dollar may weaken from too much of it, but other currencies are too few. China, as I have said, will suck all its currency back to China, hardly a recipe to circulate its currency.

All the solutions that I have in mind have very bad draw backs, and I am in noway original in this thought.

That is the balance I refer to. That and all the unexpected events and unintended consequences which shift the sands. Why I believe policy must remain fluid and adaptive.

I suspect our shift to energy independence will be one of the biggest game changers in the last 50 years! Bringing with it both economic strength and unanticipated challenges.

[shaker281]

Originally Posted by Hoonose

But hey, but at least you're a 1%'er!

Eugene Fama: QE Doesn’t do Much | PRAGMATIC CAPITALISM

Father of Modern Finance Weighs In - CNBC

Santelli Stunned As Nobel Winner Fama Explains Fed Unwind "Is No Big Deal" | Zero Hedge

Check out the 99%'ers in the Zero Hedge comments.

Am I wrong that Fama and Santelli are 100% in lockstep on policy and Santelli only goes ballistic (his default mode) when Fama doesn't support Santelli on the future impact of tapering?

So, if QE tapering ends up no big deal will that prove Santelli and the Tea Party lack any credibility?

[Hoonose]

Originally Posted by shaker281

Am I wrong that Fama and Santelli are 100% in lockstep on policy and Santelli only goes ballistic (his default mode) when Fama doesn't support Santelli on the future impact of tapering?

So, if QE tapering ends up no big deal will that prove Santelli and the Tea Party lack any credibility?

Tapering won't be a non-issue, but overall QE just doesn't have much of an impact on the economy. At some point the powers that be will admit to it, taper and that's it. Santelli is asking why not continue ad infinitum? I don't think that anyone knows. But why, if it is not doing much?

[jerseyexpat]

"Don't rock the boat, don't tip the boat over..."

[cw30000]

Originally Posted by celcius

Printing does not cause inflation or currency devaluation. It is not a simple fraction with supply on the denominator.

Inflation is a market phenomenon; the product of supply and demand. MV=PY

Printing only affects the supply (M). Tight credit and anemic velocity has kept demand (V) significantly lower since the crisis.

The forces counteract, ergo minimal inflation.

Printing or course create inflation. Money is one side of every transaction

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