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The US government is inviting inflation

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Re: The US government is inviting inflation

#21

Post by sovsovsod »

zpeti wrote: post #2

After following Peter Schiff for over a decade, and him being thoroughly wrong about inflation after 2008, I can't help but think "this time is different". Before 2020 all money printing went to banks, which increased the wealth of the 1% and increased asset prices, but it didn't create inflation. But now, we have actual helicopter money. And this time I believe Peter when he says, once you start with stimulus cheque…

Was he really wrong?

If I gift money to an extremely over leveraged banks to save them and, with puckered sphincters (they just saw the abyss), they hold onto it then we won’t “see inflation”. It’s there, but it’s latent inflation.

If I demolish wages by exporting jobs overseas, that will have a deflationary effect to counter the effect of inflation.

If I replace cocoa butter with food wax, I hide inflation.

If I don’t include price of housing in the CPI [1], I manipulate inflation.

Schiff’s theory is sound. But, like the GME debacle proved, it’s like shoring a doomed company. Can you stay solvent long enough to prove your point?

[1] I know and understand the argument why houses it arent included. I just reject the argument completely as flawed.

Re: The US government is inviting inflation

#22

Post by xwdv »

turbinerneiter wrote: post #13
xwdv wrote: post #3

Earlier quoted context omitted.

A powerful argument against UBI.

So, bailing out the rich is good, feeding the poor causes an inflation crash. What a world we live in.

The poor would soon learn their one shot out of poverty is keeping their job and throwing their UBI income straight into the stock market. This would propel the prices of equities to even greater stratospheric heights, and as the investor class gets richer eventually the prices of all commodities rise to capture this easy money flowing around. So now the poor have more money but it still buys less or equal to what it did before, so it’s a wash.

Meanwhile anyone who isn’t putting all their UBI into stocks and is instead using it to live and pay bills will fall behind and be comparatively poorer to everyone else. It will happen.

Re: The US government is inviting inflation

#23

Post by ErneX »

dstroot wrote: post #17
beervirus wrote: post #5

Assuming he’s right, what do I do about it? Buy gold? Buy BTC? Buy foreign equities?

Voting up because this is the question we should be exploring. If you believe the thesis that inflation is here or due soon (I do) then what?

Get a fixed rate mortgage and buy some property

Re: The US government is inviting inflation

#24

Post by rwilson4 »

mensetmanusman wrote: post #7

Inflation is already happening, that is why housing and equities are so high. It isn’t happening equally amongst the basket of commodities that one can purchase, but it is happening in aggregate. This is actually a feature of our currency system. If inflation didn’t happen, everyone would hold back spending until the next year; this is what caused the great depression.

I'm really curious about this possibility. How would we prove or disprove this?

Re: The US government is inviting inflation

#25

Post by wayoutthere »

beervirus wrote: post #5

Assuming he’s right, what do I do about it? Buy gold? Buy BTC? Buy foreign equities?

Not sure any of those will protect you. US equities should perform ok — IMO they’re already inflated because that’s where most of the “extra” money supply is sitting on the sidelines. Commodities futures (namely food) are probably your best play.

This has happened before — 90s Japan is what the US has in store for the 20s. The same collection of factors (high valuations after decades of rapid growth, a declining birth rate and an aging population) are present in the US. The main difference being there is no “safe haven” currency; the US is still a superpower and a declining US economy will hurt the global economy and set the stage for China to take over as the sole global superpower.

Re: The US government is inviting inflation

#26

Post by internetslave »

xyzzy4747 wrote: post #9
eej71 wrote: post #4

While I"m sympathetic to his worries, I can't help but wonder if Michael Burry is actually just a one hit wonder. Granted, I'm not even a one hit wonder so he's still one up on me. But still. I'm not sure his conclusions should be taken any more seriously than anyone else.

He's at a minimum a two hit wonder so far: 1. Predicted housing bubble crash and shorted it 2. Publicly took a large stake in Gamestop over a year ago, putting something like 20-30% of his portfolio in it.

He also shorted Tesla

Re: The US government is inviting inflation

#27

Post by turbinerneiter »

dstroot wrote: post #17
beervirus wrote: post #5

Assuming he’s right, what do I do about it? Buy gold? Buy BTC? Buy foreign equities?

Voting up because this is the question we should be exploring. If you believe the thesis that inflation is here or due soon (I do) then what?

Just watch wealth being transferred upwards, as always.

I'm considering real estate, but don't have enough money for the downpayment, and in a crash, I will lose my job like everyone else and not be able to make my payments.

Re: The US government is inviting inflation

#28

Post by giantg2 »

kyrieeschaton wrote: post #16

20% of all dollars were created in 2020. The only thing preventing that from translating into the broader price level is that money velocity collapsed due to the Covid shutdowns. Instead most of that has channeled into financial and property asset prices. Once velocity increases, as is the plan if you assume 2021 is the year we "recover" from Covid restrictions, the Fed will have a choice between inflation and deflat…

Considering Yellen has basically stated (and has a history of doing), she would rather do too much and deal with inflation rather than not do enough.

So my take away is that we'll see inflation above 3% in the next two years.

Re: The US government is inviting inflation

#30

Post by alexmingoia »

Theoretically, inflation results from an increasing amount of money chasing the same amount of goods. But, as long as supply can rise with demand, inflation should not occur.

The Fed manages inflation. If it gets too high, they can decrease bond prices and raise interest rates. It’s actually hard for them to increase inflation, as they can’t increase government expenditures or give people money. Lowering rates doesn’t do much when rates are zero and banks aren’t lending.

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