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The ballooning money supply may be the key to unlocking inflation in the U.S.

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Re: The ballooning money supply may be the key to unlocking inflation in the U.S.

#51

Post by jariel »

alexjray wrote: post #23

The fed has pumped 2.3 trillion dollars into the economy in the past six weeks.... I don't see how the dollar won't crash eventually. Why would foreign countries still buy US bonds?

Because everywhere else is a little worse.

You can loose 2% in the US, but 10% in Italy.

So what do you want to do?

If this crisis were specific to the US, things would be different.

Also, with seigneurage of the US dollar, it gives a lot of elasticity to the process. Put another way 'The USD is also a big international currency that everyone else depends on somewhat'.

Re: The ballooning money supply may be the key to unlocking inflation in the U.S.

#52

Post by chrischattin »

foota wrote: post #33
scsilver wrote: post #28

Earlier quoted context omitted.

The people who continue to jumble up inflation by its consumer defenition with the huge expanding of the amount of us dollars are only shooting their own wealth and anyone who listens to them's wealth in the foot. All you have to look at is stocks and home real estate to see that assets are ballooning no matter how cheap a dozen of eggs stays.

I mean, to some degree I'm not sure how much it matters. If there's some delayed response to the asset inflation then it'll be concerning, but why are inflated asset prices an issues in and of themselves?

Food, shelter and transportation aren't included in the CPI. Yet those things are essential for quality of life. Inflation is the reason you can't own a house and support a family on a single income anymore.

There are a couple other indexes out there that track total cost of living that are pushing ~10% per year inflation right now.

Re: The ballooning money supply may be the key to unlocking inflation in the U.S.

#53

Post by MichaelApproved »

scsilver wrote: post #28
apsec112 wrote: post #12

People keep predicting inflation, but it remains stubbornly below the Fed's target rate of 2%, which is itself low compared to 20th century averages. https://en.wikipedia.org/wiki/United_States_Consumer_Price_I...

The people who continue to jumble up inflation by its consumer defenition with the huge expanding of the amount of us dollars are only shooting their own wealth and anyone who listens to them's wealth in the foot. All you have to look at is stocks and home real estate to see that assets are ballooning no matter how cheap a dozen of eggs stays.

Don’t forget ballooning healthcare costs.

Re: The ballooning money supply may be the key to unlocking inflation in the U.S.

#54

Post by qw3rty01 »

as_keyof_typeof wrote: post #4

Is anyone (who is paid/lives in the US) concerned about the future value of USD? A lot of my friends are saying I should be investing in cryptocurrencies for future safety, but I don't see those as very stable, so I'm hesitant to put my savings into it.

Cryptocurrency is certainly not a good place to put savings, as its price is way too unstable to be a store of value. If you're unsure about the value of the USD, then traditional investments like gold would probably be a better choice. Like other comments mention, even though lots of money was created for economic stimulus, it's used in such a way that makes it deflationary long-term (as seen by the projected 0.62% inflation rate for this year and only 2.24% next year[1]).

[1] https://www.statista.com/statistics/244983/projected-inflati...

Re: The ballooning money supply may be the key to unlocking inflation in the U.S.

#55

Post by vkou »

rthomas6 wrote: post #44
scsilver wrote: post #28

Earlier quoted context omitted.

The people who continue to jumble up inflation by its consumer defenition with the huge expanding of the amount of us dollars are only shooting their own wealth and anyone who listens to them's wealth in the foot. All you have to look at is stocks and home real estate to see that assets are ballooning no matter how cheap a dozen of eggs stays.

Well, for stocks, the P/E ratio is also extraordinarily high, so it's not inflation there. At least not mostly. The stock market is just overvalued and there will be a correction at some point in the future.

For t -> ∞, a prediction that the stock market will correct in the future will always hold true.

The question is, will it correct to levels below its current ones? If you have an answer to that, you can make a lot of money.

Re: The ballooning money supply may be the key to unlocking inflation in the U.S.

#57

Post by whoisburbansky »

disown wrote: post #31
whoisburbansky wrote: post #9

Earlier quoted context omitted.

Alternatively, it might turn out to be a pretty good counterbalance to China's tampering with their money supply to keep the yuan artificially much cheaper than it would be in a free market.

Everybody "tampers" with their money supply. And there is no such thing as a "free market". Not in currency, international trade, etc. All markets are controlled and manipulated. It's like every parrots what they hear. Edit: Oh god. Here comes the "CCP" nonsense. All countries have tight capital controls. And the tight capital control was part of the bargain for trade between china and the US. It's not like they did…

Sure, but there's degrees of tampering; not many countries can get away with implementing the kind of tight capital control regime that the CCP has in place.

Re: The ballooning money supply may be the key to unlocking inflation in the U.S.

#58

Post by beefield »

rthomas6 wrote: post #44
scsilver wrote: post #28

Earlier quoted context omitted.

The people who continue to jumble up inflation by its consumer defenition with the huge expanding of the amount of us dollars are only shooting their own wealth and anyone who listens to them's wealth in the foot. All you have to look at is stocks and home real estate to see that assets are ballooning no matter how cheap a dozen of eggs stays.

Well, for stocks, the P/E ratio is also extraordinarily high, so it's not inflation there. At least not mostly. The stock market is just overvalued and there will be a correction at some point in the future.

That kind of is asset inflation. You get smaller share of the company with same amount of money than before.

Re: The ballooning money supply may be the key to unlocking inflation in the U.S.

#59

Post by anoraca »

bpodgursky wrote: post #48
scsilver wrote: post #37

Earlier quoted context omitted.

I think the safest dollar hedges right now are bluechip tech stocks and a forever home(if you need one and get take advantage of rock bottom rates)

I don't know why you'd say tech stocks (where volatility is high) but land and safe equities are the traditional hedges yes.

They said bluechip tech stocks. Companies that have been around for decades and aren't going anywhere. Microsoft, Apple, Amazon, Intel, etc.

Re: The ballooning money supply may be the key to unlocking inflation in the U.S.

#60

Post by diob »

scsilver wrote: post #28
apsec112 wrote: post #12

People keep predicting inflation, but it remains stubbornly below the Fed's target rate of 2%, which is itself low compared to 20th century averages. https://en.wikipedia.org/wiki/United_States_Consumer_Price_I...

The people who continue to jumble up inflation by its consumer defenition with the huge expanding of the amount of us dollars are only shooting their own wealth and anyone who listens to them's wealth in the foot. All you have to look at is stocks and home real estate to see that assets are ballooning no matter how cheap a dozen of eggs stays.

Right, I've posted this before, but long term wealth building is becoming too expensive for the average person.

The only reason food hasn't become too expensive is wealthy people don't have a reason to go out and buy up all the food. They do, on the other hand, have reason to go out and invest.

This is, however, starting to fall apart for goods that don't normally have reason to be bought up. In other words, folks with capital now realize they can hoard those resources as well in order to price gouge. This is most evident in consumer electronics as of late.

Usually, these aren't super wealthy individuals, but instead folks who have been priced out of traditional wealth building like stocks / housing. They may not be able to afford a down payment on a house, but they can sure as heck spend a few thousand buying up consumer goods hoping to gouge others.

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