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Their main focus is asset prices since sales, incomes, GDP, borrowing, etc. all flow from inflating asset prices to offset equity withdrawal and margin borrowing. Everything rises together like we see recently when the ECB quashed long-term interest rates in March to prop up the Nasdaq and the tech leaders. Everything can fall together as with bonds, equities, and cryptocurrencies in March 2020. Drop in asset price in one area can force deleveraging and asset reallocation that spread to other asset classes.
indeed,we could see it as early as tomorrow morning,if bitcoin does not recover from its $8k drop and 2 died in a TSLA car accident in Houston which takes 32000 gallons of water to put out the fire and Putin invaded Ukraine and IRAN dropped off a bomb on its neighbor and Chinese prefer to ride their bicycle to work as they are getting too fat eating junk food.
Digital currency have to be infinite in order for the other poster's usury model to work.
I think he/she is saying usury is just not going to work because you cannot have infinite currency. With infinite currency you may as well give everyone infinite universal income. No one will have to work.
The usury model has worked so far because population has been growing and the economy has continued expanding.
We are already there. The only thing stopping us from printing as much currency as we need is... what precisely?
We're already to the point where "things" are pretty much worthless now, to include posession of cash. We throw out more food than the world's population can possibly eat. People are hoarding cash and just pouring back into the markets for a lack of anything to spend it on.
Look what happened in the pandemic, we shut everything "non-essential" down! We canceled both jobs and school and somehow the economy did just fine and it only hurt 15% of the population. 30% say they're doing better and 55% say they're doing about the same. The stock markets soared to unimaginable heights and look likely to never drop significantly again.
Look at us now, stuff is still half shut down, unemployment's only about 6-7%. We're all working from home, we didn't need those jobs or school after all. Many of those jobs are never coming back because we never needed them to begin with.
Yes, people won't need to work because we don't need them to and in the future we'll need even fewer. There are more people than necessary jobs available for them.
Property, assets, and the ability to command services are all that's valuable anymore.
I think there will be some kind of UBI set up within the next 100 years.
Thats like a utopia then. No one will work. All necessities met by machines/robots. But then who will be at the top? Who will get what? Who will have more than others? Will it all be decided by who does best in school?
Quote:
Originally Posted by oceangaia
The usury model has worked so far because population has been growing and the economy has continued expanding.
Growing how though? By changing the nominal value of assets like RE? Then having banks just increase the nominal amount they "loan" out, and just give to a buyer. Buyer hands off to the seller, and each subsequent times this happens they just increase the nominal numbers.
Thats like a utopia then. No one will work. All necessities met by machines/robots. But then who will be at the top? Who will get what? Who will have more than others? Will it all be decided by who does best in school?
Far from it.
We won't give the currency to actual people beyond subsistence level. Those who have the inside track through connections, ownership, or privileged education and skills will get the good jobs. I don't think we're going to like the transition at all.
It will probably be a top 1% class that is rich and powerful beyond imagination and so disconnected from everyone else they don't even fathom what's wrong. We already have that.
Then the next 10-15% privileged ones who are pretty rich & own the right asset classes, but not the elites. We already have that too.
Then the next 30% middle class who do okay & occupy the decent jobs. We already have that.
Where it will fall really badly on are the lower 45-55%. Currently most of them can get jobs in the menial and semi-professional services. Although now about 1/4th of them can't with the pandemic effects. Increasingly, that share will expand. More and more will struggle to find stable jobs. We'll throw enough money at them so they don't starve, but they will basically be stagnant without much hope of ever moving up. I'm not sure what will happen but I bet it won't be good. Probably a lot of tension & unrest among the lower classes, the way Europe was in the 19th century. Again we're already seeing it with this urban unrest.
Where there would be MAJOR unrest is if the middle classes start to perceive that they're become lower class. That's the stuff revolutions are made of - they tend not to come from the lower class, they come from former aspiring classes that no longer have options and are aggrieved. It'll be at that point I think much money will get thrown at them, because there will be more than enough money to throw.
As for who will do the grunt work, that's easy - immigrants. Citizenship of the privileged countries will be something to work toward. This will also cause conflict. See again, Europe 19th century.
Growing how though? By changing the nominal value of assets like RE? Then having banks just increase the nominal amount they "loan" out, and just give to a buyer. Buyer hands off to the seller, and each subsequent times this happens they just increase the nominal numbers.
Where there would be MAJOR unrest is if the middle classes start to perceive that they're become lower class. That's the stuff revolutions are made of - they tend not to come from the lower class, they come from former aspiring classes that no longer have options and are aggrieved. It'll be at that point I think much money will get thrown at them, because there will be more than enough money to throw.
This is why I think Blockchain technology and Crypto is the best solution. It allows a peaceful alternative to the AOC/Che Guevara/Mao/Marx narrative.
what is the real reason?
does it really help anyone?
buy a house,buy a car ,r people who have credit card debt dont see any savings.
Fed buying treasury instruments every month?to keep rate low??
Or are we afraid if rate rises,foreign money will come in ?
what is the difference if rate is zero vs rate is 2%?
The short answer is that inflation is still about zero. For example despite the recent "spike" the gas price at the Mobil station on the Hutchinson Parkway was $3.199, still below the $3.399 it hit after Hurricane Katrina in 2005 and $4.859 it hit after Superstorm Sandy in 2012. Even adjusting out those weather-induced spikes, it was at $3.399 during the summer of 2006 and $4.459 in July 2008, before tumbling to $2.119 briefly during the 2008-9 financial meltdown.
Other non-gasoline prices have also barely budged. Some prices to be fair have risen, but some have declined.
Other non-gasoline prices have also barely budged. Some prices to be fair have risen, but some have declined.
Seems to me prices are up on everything. Checked car rental rates lately?
Or shopped for a vehicle, new or used?
High consumer demand coupled with a manufacturing shortage of microchips — key parts needed for today’s autos to operate — have pinched new-car inventory at dealerships across the country. And with drivers seeking affordable options for hitting the open road, the used-car market isn’t offering much of a reprieve. https://www.cnbc.com/2021/04/16/car-...nventory-.html
Grocery prices are up big. According to USDA data released last week, the Consumer Price Index for grocery store or supermarket food purchases last year was up 3.5 percent: That's not only a significant jump from 2019, where these retail "food-at-home" prices were up only 0.9 percent from the year before, but also well above the 20 year annual average of 2.0 percent and the highest annual increase since 2011. https://www.foodandwine.com/news/gro...eased-pandemic
Gasoline is going to hurt more than people think. The effect has been mitigated by so much WFH and some things still shut down. Gasoline prices were the biggest contributor to the monthly gain, surging 9.1% in March and responsible for about half the overall CPI increase. Gasoline is up 22.5% from a year ago, part of a 13.2% increase in energy prices. https://www.cnbc.com/2021/04/13/us-c...arch-2021.html
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