41–50 of 118 posts
Don't forget Weimar Germany was under the thumb of the truly punitive economic features of the Treaty of Versailles. French PM Clemenceau insisted on punishing Germany for starting WW1. The Marshall Plan after WW2 was a largely successful effort to avoid repeating that, for the west anyway. John Maynard Keynes more-or-less predicted the Weimar meltdown in his 1920 book The Economic Consequences of the Peace. https://…
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…
A powerful argument against UBI.
UBI is really a strange beast. I wish I had more time or fitting frameworks / mental models to understand better the consequences.
UBI...
- might be the only solution out of the crazy money printing and MMT
- seemed to me initially (!) strangely similar to communism/socialism, but actually is very different (for example there is something to be gained from being innovative or creating stuff (instead of doing the minimum you can), which was not (!) the case in communism
- might be the only solution when most (current) jobs will be replaced by robots (if all agriculture gets 99% automated, can we not have basic (!) free food for everyone? And additionally just a simple roof... both would cover most of your basic needs)
I am not sure about UBI, I also see problems with it too, but could solve more of those than it creates... maybe?
edit: formating
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.
Most money is earned by managing risk. Your winners win big, your losers don't break the bank.
Taking anyone's conclusions seriously is pretty silly, they're all just data points.
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…
Hum... Money management 101 says that if velocity goes down, you must print more money to compensate. Otherwise you get a deflationary crisis added into your real world one. (And fiscal policy should intervene increasing the velocity, but fiscal policy is a fraud everywhere, so nothing new here.)
The real test on the seriousness of the US monetary policy is whether they will drain the market once the velocity increases. I do expect them to, but well, anything may happen.
Anyway, that part of the comment on the title is a case of "well, duh?!?" What else could we expect any central bank to do right now? But the data is still interesting.
We heard the same thing after the post 2008 stimulus too. It seems some of the very obvious predictions aren't so easy anymore. I understand where folks are coming from generally with these predictions, and I don't necessarily disagree with a lot of their ideas..... but the outcomes just don't seem to follow.
Earlier quoted context omitted.
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
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…
1) If wealth distribution in the US is getting more top heavy, is a certain percentage of the currency slowing down in velocity as it is held by wealthier people who aren't spending it?
2) What is the rate of population change vs. the change in money supply? If the population is growing at 5% a year, the money supply growing at 5% a year should be net neutral for inflation. I think the US population is growing less than 1% per year so maybe this isn't really a hedge against inflation.
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…
Inflation is only a problem if it doesn’t reflect actual economic activity.
Thanks to COVID there is so much slack built into the real world economy right now that there is probably a ton of capacity to absorb any additional “created” dollars.
I suspect the real problem will be if for whatever reason the vaccines start failing and COVID comes raging back and worse for at least another year.
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?
We heard the same thing after the post 2008 stimulus too. It seems some of the very obvious predictions aren't so easy anymore. I understand where folks are coming from generally with these predictions, and I don't necessarily disagree with a lot of their ideas..... but the outcomes just don't seem to follow.
Do you believe that the consequences of 2008 have been fully borne out? I think it's possible that one day we or someone else will look back on 2008-20?? and judge the consequences of "quantitative easing" which hasn't really stopped during this entire period. It seems to me that we've just been kicking the can further and further down the road.
It seems like whatever happens next isn't 2008 stimulus.