Blip-ity bloop beep beep money !
Zoom ! More money ! Print it R2
Beep beep beep ... be boop boop beep ... this is machine comprehensible don’t hate human
More money !
You are all trolls and sheep
The ballooning money supply may be the key to unlocking inflation in the U.S.
291–300 of 319 posts
Re: The ballooning money supply may be the key to unlocking inflation in the U.S.
#292Earlier quoted context omitted.
This is the new definition, in old dictionaries inflation was defined as increase in money supply. Using products to measure inflation, is a terrible mistake in my estimation, because cost has been falling, so stable prices don't mean no inflation. It just means the governments got wise to just take what they can get without being noticed.
You can't define inflation as you want. Inflation is an government official indicator with a very clear meaning.
> You can't define inflation as you want.
You can; whether that's useful or not depends on the definition and context of use.
> Inflation is an government official indicator with a very clear meaning.
No, its not. Inflation is a broad concept (well, actually, a set of different and interrelated broad concepts) with a number of different official government measures. The most common US government measure of price inflation, the most common kind people talk about, is the all items CPI-U (Consumer Price Index for All Urban Consumers.) But there are lots of other inflation measures, including official government ones used for important purposes, like the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) which is used as the basis for Social Security COLAs. And also frequently cited is the CPI-U for all items excluding food and energy. There are also CPIs for other populations, CPIs for other categories of goods and services, PPIs (Producer Price Indexes), ECI (Employment Cost Index), and others. All of these are official government price inflation measures.
There are also official government measures of money supply, which equivalently are measures of monetary inflation. And there are a whole bunch of those, not just one.
Re: The ballooning money supply may be the key to unlocking inflation in the U.S.
#293Earlier quoted context omitted.
You can't define inflation as you want. Inflation is an government official indicator with a very clear meaning.
I didn't define as I want to, I pointed to the fact that the meaning in old dictionaries used to be increase in money supply. My point doesn't depend on this tho, measuring inflation by rising prices isn't ideal, because you will be measuring multiple things at once, and only the people lose in that case. Prices can rise and fall for multiple reasons, and knowing why helps to fix it. If the price goes up because of a…
> I pointed to the fact that the meaning in old dictionaries used to be increase in money supply.
Monetary inflation is one thing denoted by the word "inflation", and perhaps it used to be the more common use in general conversation. Its not anymore, price inflation, particularly consumer price inflation is the most common general use.
> measuring inflation by rising prices isn't ideal
It certainly is if you are doing for a purpose to which price levels are most directly relevant, which is quite commonly the case. There's nothing mystical about the word "inflation" that creates an all-purpose best measure (and, in fact, "inflation" is a name for lots of different things, which have complex interrelationships.)
Re: The ballooning money supply may be the key to unlocking inflation in the U.S.
#294Earlier quoted context omitted.
When the US Treasury sells treasuries and the Fed buys them, the result is that they don’t have to be repaid. (If held to maturity, the money goes to the Fed, and the Fed’s profits go to the government.) The Fed bought about 2 trillion in treasuries since the beginning of the year and this could be thought of as printing money, if it isn’t undone.
Well... not really: * The Fed buys treasury notes and bonds from third parties, because it cannot buy them directly from the US Treasury at issuance. * The Fed can earn and book profits from treasury securities only to the extent the US Treasury continues to make interest payments and repay principal . * The US Treasury can pay continue to pay interest and repay principal only with money that is (a) borrowed from thi…
I don’t see those details changing the essentials.
* An investor acting as middleman between the Treasury selling a bond and the Fed buying it hardly matters. The Fed is supporting the price and ends up with the bond.
* Whether or not an interest payment is made to the Fed, this is money that the government has in the end. The point is that nobody outside the government gets any payments, so the debt is effectively neutralized.
I’m not sure the third point is true. Revenue from the Fed’s operations aren’t restricted funds, are they? It may add a lag, though.
It’s true that this maintains the independence of the Fed, but currently the Fed is openly advocating that Congress should spend more. They can cooperate to create and spend money when they agree that it’s a good thing.
They might not say explicitly say that this is what they’re doing, though.
Re: The ballooning money supply may be the key to unlocking inflation in the U.S.
#295Earlier quoted context omitted.
The people who are working in the post-it note and makeup factories want houses too, you know.
The argument wasn't that they had to invent something to buy a house, it was that it's not a hopeless situation where there is no class mobility. Someone substituted ASSETS for HOUSES for some reason but its not the same thing. ASSETS are what allow some people to have an advantage over others in business. So many babies on these forums whine about their inadequacies instead of bettering themselves. Making my imagina…
I think you do have some interesting things to say and could convey them better without the negativity of the last paragraph.
I'm coming from the perspective of someone whose extended-extended family ranges from dirt poor laborers to set-for-life landlords.
I'm also drawing on my own experiences. I'm a software engineer, currently on hiatus to work on a YouTube series. I lost a good chunk of change from non-housing assets in 2008 from the meager 401k my internship paid into. I lost the rest when I had to cash in the 401k and sell furniture to have enough cash to wrap up my startup when the market I was in dried up (more like soaked up and polluted by the giant 800lb sponges, plus numerous other factors nobody cares about) and Apple took Primesense out.
So here's what I am saying and relates to what I think everyone else is saying: at every point in my life where I've felt like "now is the time to buy a house," I've just been a few percent short on the down payment. So I keep working and getting promotions and raises and saving, and wouldn't you know, now I'm several more percent short on the down payment despite having more saved, because the treadmill keeps getting longer and spinning faster. And as for other assets, yeah, my stocks are up, but houses are still up more than my risk-tolerable gains.
Meanwhile the people who would have been able to buy reasonable houses in reasonable neighborhoods with reasonable jobs don't have stocks to begin with, and are priced out by migrants with portfolios from even higher cost areas and the massive investors I'm currently having to rent from.
Re: The ballooning money supply may be the key to unlocking inflation in the U.S.
#296If anyone is interested in hearing some incredibly knowledgeable and relatively apolitical people discuss this topic check out: https://www.youtube.com/watch?v=B4xcCO9v-Os&t=13s Jeff Snider is the most knowledgeable person I have ever heard speak on international monetary issues.
Thanks for posting this. After watching I searched for some diagrams on this process and came cross another one of George Gammon's videos (https://www.youtube.com/watch?v=oLhO7tIAtoY). He comes off super sketchy trying to me, almost like a get rich quick salesman, but the actual information in the video seemed legit.
Anyway, based on the discussions and videos, it seems like QE by itself is relatively neutral with regards to inflation. what's really important is whether the process leads to more lending, but that is largely controlled by other factors.
It definitely didn't seem like QE was actually printing money though, because the govt still has to pay back the initial bond.
At least that was my novice interpretation.
Re: The ballooning money supply may be the key to unlocking inflation in the U.S.
#297If anyone is interested in hearing some incredibly knowledgeable and relatively apolitical people discuss this topic check out: https://www.youtube.com/watch?v=B4xcCO9v-Os&t=13s Jeff Snider is the most knowledgeable person I have ever heard speak on international monetary issues.
Thanks for posting this. After watching I searched for some diagrams on this process and came cross another one of George Gammon's videos ( https://www.youtube.com/watch?v=oLhO7tIAtoY ). He comes off super sketchy trying to me, almost like a get rich quick salesman, but the actual information in the video seemed legit. Anyway, based on the discussions and videos, it seems like QE by itself is relatively neutral with…
Yeah it took me a while to come around to Gammon, he uses a really clickbaity/scammy visual language and marketing copy to get subscribers but if you make it past that to the content, the content is mostly very high quality. The specific video you posted is one of his best.
And right, the classic equation from macro 101 that sums this up is: P = ( M x V ) / Y
Where price level = money supply x velocity of money / gdp
Velocity is the amount of times a given dollar changes hands on average.
So they are saying that if QE fed reserves never make it out into the real economy via lending or monetized fiscal policy, velocity essentially equals 0 and never affects the price level.
Also on a side not, the other guy George mentions in that video Steve Van Metre is also excellent.
Re: The ballooning money supply may be the key to unlocking inflation in the U.S.
#298Earlier quoted context omitted.
Are there "unofficial" weightings available so that inflation could be analyzed under a different set of assumptions?
Yes: http://www.shadowstats.com/alternate_data/inflation-charts This site calculates CPI using the old way of calculating it, and according to that method the inflation rate is closer to 10%.
That's what the site author claimed he does. Others claim that what he actually does is just adding a few percentage points to the official stats[1]. Among academic economists, the site author is largely regarded as some kooky conspiracy theorist[2].
Personally I just see him more as small time business man making a nice living from satisfying some market demand for figures that proof government is lying to you. For those who want to find out for themselves, here's the raw BLS data[3] and methodology[4].
[1] https://azizonomics.com/2013/06/01/the-trouble-with-shadowst...
[2] https://www.thestreet.com/economonitor/emerging-markets/deco...
Re: The ballooning money supply may be the key to unlocking inflation in the U.S.
#299Earlier quoted context omitted.
> 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 sometimes i get the idle premonition that if they started trying to do this tomorrow they could do a shockingly good job , to the point that you could almost claim that the only thing holding together social order at this point is that they are not. not saying i believe this-- i don't even really…
On the one hand, it's a bit of a cyclical argument - The only thing holding together social order is social order. On the other, the same is true of anything which is relied upon on for life and dependent on ongoing financial exchange - Food, water, housing (if you rent). If a lot of excess capital suddenly flooded into those markets and gobbled up stock/pushed up demand, joe average could be priced out. All kinds of…
yeah that's the kind of reasoning that makes me feel better about it-- it's not really clear what kind of shock i would really be expecting to happen in the course of ordinary civilization that would cause this sort of run on life support / life-essential stuff that would also not itself be a bigger cause for concern than the system imploding (e.g. a proletariat uprising or world war would do the trick, but would be a bigger deal than the resultant economic shock alone)
Re: The ballooning money supply may be the key to unlocking inflation in the U.S.
#300Earlier 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)
What if you don't need a home, but could realistically finance one? Is there incentivisation in real estate over stable(-ish) equities if you're not looking for a long term home for yourself/family
The only advantage I see is that huge amount of capital you can borrow at a low rate, probably lower than the rate of a weakening dollar, and could potentially turn it into a rental to pull in inflation adjusting income, in addition to your fixed work income. That said, pulling your down payment out of rising stocks to do so may not be the most profitable, but it does serve as a good diversification of asset.
Im not a financial advisor, just a software engineer, but my father is and I've convinced him into buying a second home with me when the right one becomes available (waiting for the supply to open up a bit, we lost our first offer to a cash offer). Key points for purchasing were diversification of assets, pulling out some money from the high riding market before a blue sweep and subsequent taxes, and rates so low that combined with inflation(including assets) the gov is paying you to take out a loan.