31–40 of 326 posts
> Remember that some people thought that government borrowing ... facilitated by quantitative easing (Fed bond-buying) ... was going to lead to substantial inflation. But it didn’t. Every time someone says "but where's the inflation" I sigh. Look at literally any financial asset, SP500, stocks, real estate, even bond values (the inverse of interest rates). There is your inflation. Maybe we like asset inflation, maybe…
The government prints money. They could stop accepting taxes tomorrow and still be able to keep spending. They print the money.
Treasuries exist as an accounting fantasy for people to believe the government needs to borrow, they don't. Any treasuries outstanding today basically just represent dollars to be printed in the future.
What matters is amount of dollars in circulation and velocity of money. Inflation.
> Remember that some people thought that government borrowing ... facilitated by quantitative easing (Fed bond-buying) ... was going to lead to substantial inflation. But it didn’t. Every time someone says "but where's the inflation" I sigh. Look at literally any financial asset, SP500, stocks, real estate, even bond values (the inverse of interest rates). There is your inflation. Maybe we like asset inflation, maybe…
"Official" inflation is based on the CPI, consumer price index, which is based on a basket of goods, not including CoL things like housing. edit: I stand corrected. It does include housing, but this "Owners' equivalent rent of residences" counts the cost of a Mortgage, which of course is majorly impacted by interest rates. It doesn't include the value of the housing market directly, though. Does anyone actually think…
> Remember that some people thought that government borrowing ... facilitated by quantitative easing (Fed bond-buying) ... was going to lead to substantial inflation. But it didn’t. Every time someone says "but where's the inflation" I sigh. Look at literally any financial asset, SP500, stocks, real estate, even bond values (the inverse of interest rates). There is your inflation. Maybe we like asset inflation, maybe…
How can you have inflation while most of the services and commodities people are using are not increasing in price? Sure, you have equities rising, but that’s about it. Inflation because call options are flooding the market? Bonds are going down, real estate market is stagnant.
> Remember that some people thought that government borrowing ... facilitated by quantitative easing (Fed bond-buying) ... was going to lead to substantial inflation. But it didn’t. Every time someone says "but where's the inflation" I sigh. Look at literally any financial asset, SP500, stocks, real estate, even bond values (the inverse of interest rates). There is your inflation. Maybe we like asset inflation, maybe…
How can you have inflation while most of the services and commodities people are using are not increasing in price? Sure, you have equities rising, but that’s about it. Inflation because call options are flooding the market? Bonds are going down, real estate market is stagnant.
> Remember that some people thought that government borrowing ... facilitated by quantitative easing (Fed bond-buying) ... was going to lead to substantial inflation. But it didn’t. Every time someone says "but where's the inflation" I sigh. Look at literally any financial asset, SP500, stocks, real estate, even bond values (the inverse of interest rates). There is your inflation. Maybe we like asset inflation, maybe…
If you owe the bank $100, that's your problem. If you owe the bank $1000 billion, that's the bank's problem.
Oh and they can form a 100 million man army.
I try to post this everywhere people want to start yelling about federal debt (which correlates much more closely to the thing the government wants to borrow for than the actual size of the debt): Interest as Percent of Gross Domestic Product (essentially: how much money do we need to pay for our spending habits): https://fred.stlouisfed.org/series/FYOIGDA188S We are nowhere near the peaks that we saw in the 80's and…
Buddy, the interest as a percent of gdp matches the 80's and 90's because rates are near 0%. Real yields are negative in europe. Its not even close to the same situation. "Interest rates have been sitting at or very near GDP growth for four decades now" thats short-sighted and not really true: https://fred.stlouisfed.org/series/fedfunds Theres no free lunch, you don't get to just print unlimited money and have no con…
Japan enters the chat
* M1: https://fred.stlouisfed.org/series/MYAGM1JPM189N
* Debt: https://fred.stlouisfed.org/series/DEBTTLJPA188A
* Interest rate: https://fred.stlouisfed.org/series/INTDSRJPM193N
* CPI: https://fred.stlouisfed.org/series/FPCPITOTLZGJPN
The technical explanation why, when rates are zero, increasing the money supply doesn't do anything to inflation:
Earlier quoted context omitted.
> Theres no free lunch, you don't get to just print unlimited money and have no consequences. I think you're arguing the opposite. We are printing money, yet inflation stays stubbornly low. We borrow money, but don't have to offer any interest; in fact, in some circumstances people pay us to loan us money. That's the definition of a free lunch.
Inflation is not low, have you checked stock market lately? Have you seen home prices up 15% yoy? Education costs rising, auto, etc. There is a left and right tail of the inflation bell curve. High impact items are increasing in price rapidly while things like flat screen tv's stay low from certain market dynamics. Also because wages are not rising, inflation is rising faster than people understand even on left tail…
* https://awealthofcommonsense.com/2021/01/inflation-truthers/
* https://news.ycombinator.com/item?id=25644580
Inflation is low.