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Old 06-24-2020, 05:11 PM
 
Location: Heart of flyover America
846 posts, read 332,806 times
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Or is the USD immune to the laws of finance and economics?
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Old 06-24-2020, 05:55 PM
 
3,704 posts, read 2,149,678 times
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Short answer: no they can't, they're betting on a dangerous phenomenon such as liquidity traps or the bet that people will not increase spending because...corona virus. However so far we're not seeing this, consider this: in a very bad but possible case scenario "you" will save your money while your neighbor Joe will buy/invest more since he gets his check from the government, but if the inflation is say 100% your money is lost, vaporized...so you don't save anything.



Printing money thus is heavily linked to high unemployment: https://en.wikipedia.org/wiki/Cost-push_inflation


Expect a high increase of prices of basic goods soon, as well as increase of gold price or crypto prices or stocks, in fact the reason stocks aren't doing so horrible in the past month could easily be explained by this.



So far I'm still optimistic though, if covid resolves this summer we may see another "roaring 20s" as the echo from the Spanish flue, but if it continues to 2021-2022: inflation will be unseen.
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Old 06-24-2020, 06:08 PM
 
Location: Heart of flyover America
846 posts, read 332,806 times
Reputation: 1489
Quote:
Originally Posted by euro123 View Post
Short answer: no they can't, they're betting on a dangerous phenomenon such as liquidity traps or the bet that people will not increase spending because...corona virus. However so far we're not seeing this, consider this: in a very bad but possible case scenario "you" will save your money while your neighbor Joe will buy/invest more since he gets his check from the government, but if the inflation is say 100% your money is lost, vaporized...so you don't save anything.



Printing money thus is heavily linked to high unemployment: https://en.wikipedia.org/wiki/Cost-push_inflation


Expect a high increase of prices of basic goods soon, as well as increase of gold price or crypto prices or stocks, in fact the reason stocks aren't doing so horrible in the past month could easily be explained by this.



So far I'm still optimistic though, if covid resolves this summer we may see another "roaring 20s" as the echo from the Spanish flue, but if it continues to 2021-2022: inflation will be unseen.
At this point, it hardly matters what happens to Covid. Covid has already ripped a giant, gaping hole in hyper-bubble we had prior to the pandemic.

Fiscal policy since the late 80s has been essentially inflating increasingly larger bubbles. Now that the largest and most hideous credit bubble in financial history has been not just pricked, but shredded, will a new, bigger one be able to be inflated? I very strongly doubt it. We are reaching the limits of growth and debt expansion, and this time, there won't even be the illusion of a recovery like in the last financial crisis. No amount of worthless debt or fictional "wealth" will be able to paper over this crisis.
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Old 06-25-2020, 04:26 AM
 
2,066 posts, read 499,316 times
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No, unless the Fed has finally discovered the secret of free lunches.
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Old 06-25-2020, 08:08 AM
 
11,258 posts, read 4,792,779 times
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Originally Posted by mathlete View Post
No, unless the Fed has finally discovered the secret of free lunches.
There are almost always free lunches somewhere in any economy at any time for the picking and choosing, if one has the desire and means.

Because there are almost always unemployed, along with unused resources for production. Especially in a down economy, and relatively speaking with world war.

So if an economy is deemed down enough, or under siege from whatever by the powers that be, that is the desire.

And as the Fed can create money from nothing, that is the means.

Of course onerous inflation remains the enemy. But as the economy or war machine is supported by new moneys, if properly timed and directed, employment and productivity can increase. Improving on the economy or winning a world war. Or pandemic.


https://www.forbes.com/sites/johntha.../#66aadc25a6db

https://www.amazon.com/Keep-All-Thou...?tag=nakorn-20
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Old 06-25-2020, 08:26 AM
 
Location: The Driftless Area, WI
4,449 posts, read 1,710,762 times
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Quote:
Originally Posted by Hoonose View Post

Of course onerous inflation remains the enemy....

Only if The Fed runs out of ink....They can keep printing more money so income keeps up with inflated prices...The only ones who will lose are those left holding paper someday when The Empire collapses..and, at that point, we'll have more troubles than just holding worthless paper....(Mark Twain wrote about prices in terms of mils-- 1/100 of a cent.)


It's like playing musical chairs with one chair for every player. You can keep going as long as the band can keep playing.
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Old 06-25-2020, 08:26 AM
 
3,117 posts, read 1,163,654 times
Reputation: 7531
Quote:
Originally Posted by Hoonose View Post
There are almost always free lunches somewhere in any economy at any time for the picking and choosing, if one has the desire and means.

Because there are almost always unemployed, along with unused resources for production. Especially in a down economy, and relatively speaking with world war.

So if an economy is deemed down enough, or under siege from whatever by the powers that be, that is the desire.

And as the Fed can create money from nothing, that is the means.

Of course onerous inflation remains the enemy. But as the economy or war machine is supported by new moneys, if properly timed and directed, employment and productivity can increase. Improving on the economy or winning a world war. Or pandemic.


https://www.forbes.com/sites/johntha.../#66aadc25a6db

https://www.amazon.com/Keep-All-Thou...?tag=nakorn-20
In modern banking ‘money’ and debt are identical, there is typically no capital reserve. Governments via central banks can emit debt and will into existence any amount of “money”. But carrying debt has a cost, the interest payments, and that added vig is by nature an exponential function. History shows that governments have a poor record when it comes to dealing with exponential functions.
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Old 06-25-2020, 08:35 AM
 
11,258 posts, read 4,792,779 times
Reputation: 2384
Quote:
Originally Posted by guidoLaMoto View Post
Only if The Fed runs out of ink....They can keep printing more money so income keeps up with inflated prices...The only ones who will lose are those left holding paper someday when The Empire collapses..and, at that point, we'll have more troubles than just holding worthless paper....(Mark Twain wrote about prices in terms of mils-- 1/100 of a cent.)


It's like playing musical chairs with one chair for every player. You can keep going as long as the band can keep playing.
Of course the Fed needs no ink nor printer.
Low grade ongoing inflation is almost inevitable all over the world.
Hyperinflation of the USD very unlikely unless we lose our national productivity.
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Old 06-25-2020, 08:40 AM
 
11,258 posts, read 4,792,779 times
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Quote:
Originally Posted by TimAZ View Post
In modern banking ‘money’ and debt are identical, there is typically no capital reserve. Governments via central banks can emit debt and will into existence any amount of “money”. But carrying debt has a cost, the interest payments, and that added vig is by nature an exponential function. History shows that governments have a poor record when it comes to dealing with exponential functions.
Our Fed does not create debt, but it can create money to swap for debt. And when the Fed owns Federal debt, it is almost as if that debt was never issued. Because aside from their 6% dividend, the Fed does not profit from its money creating actions. As interest is swept back to the Treasury, the amount of interest is way less important.
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Old 06-25-2020, 08:47 AM
 
Location: Washington Park, Denver
8,618 posts, read 7,797,891 times
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Quote:
Originally Posted by Taggerung View Post
Or is the USD immune to the laws of finance and economics?
Couple things....

How many threads on the same topic are you going to start?

To ask a question like this, it would be good if you started by understanding finance and economics.
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