11–18 of 18 posts
The US has been hiding it's inflation for a while now. If you compare the quality of products vs the price of europe compared to the US, it's not even close.
The money won't lose its value. International goods will keep their prices in dollars, won't be an inflation on that side, so anything from outside won't get more expensive.
Trillions has been suddenly printed, in 2008 and this year, without making a big change in how expensive are things. If you try that, in those numbers, in any other country, you may face a big surge in inflation.
I'm not fully convinced about a hyper inflation along the lines of Weimar Republic or Venezuela or even Argentina levels inflation for that matter. However, I understand that this is only and only because of US dollar being the global reserve. The real outcome of this is that all countries that handled covid better and are back on track economically, now are richer, because the US dollar is poorer. They can either ch…
> However, I understand that this is only and only because of US dollar being the global reserve. No, historically it's because the US dollar supply is actively managed with moderate inflation as a key goal. Now, the range of other policy options enabled consistent with that, yes, has benefited from the US dollar being a global reserve currency. The Fed has recently made announcements that seem to indicate that it is…
If the monetary base suddenly doubles, the money will trickle down soon enough.
In US dollars case, it will trickle down to people and almost all other countries. Those countries will have more dollars in reserve, thus raising value of their currency or giving them low interest rates or ability to print even more.
This is extremely evident in the case of emerging markets like China. They will now get even more printed dollars in reserve and the only way to absorb it all is to print more yuan and allow more money to flow through China's economy, thus increasing wealth of the hundreds of millions still in poverty.
The US has been hiding it's inflation for a while now. If you compare the quality of products vs the price of europe compared to the US, it's not even close.
I am not sure if I follow your logic about quality of products and what that has to do with inflation.
There is massive inflation, just not in first order pricing but rather in second order pricing-to-[insert attribute] ratio.
I think even casually observing your purchases over time will yield a conclusion that you are spending approximately the same for “less” in most (but not all) areas of your life.
Earlier quoted context omitted.
> However, I understand that this is only and only because of US dollar being the global reserve. No, historically it's because the US dollar supply is actively managed with moderate inflation as a key goal. Now, the range of other policy options enabled consistent with that, yes, has benefited from the US dollar being a global reserve currency. The Fed has recently made announcements that seem to indicate that it is…
What makes you think other countries with rapid inflation don't manage currency supply? If the monetary base suddenly doubles, the money will trickle down soon enough. In US dollars case, it will trickle down to people and almost all other countries. Those countries will have more dollars in reserve, thus raising value of their currency or giving them low interest rates or ability to print even more. This is extremel…
They do. But on the (fairly rare) occasion of hyperinflation, they aren't managing it focussing on price levels, but some other objective, usually one or both of juicing short-term economic performance without regard to price levels or monetizing debt.
This is debatable. The end of our monetary path is probably not great. But with every major currency doing some form of QE, the ultimate outcome is uncertain. The current velocity of money seems to point to deflation in the near term. If inflation picks up, the Fed has a number of tools at their disposal. I distrust anyone who speaks confidently of the future in this arena.
MV = PQ
So it's true that if you hold V and Q constant, then an increase in M will lead directly to increasing prices.
But in the chart linked below, you can see that the V fell off a cliff at the same time M increased.
https://fred.stlouisfed.org/series/M2V
Looks more deflationary than inflationary to me.
As long as it can print its own money without a serious devaluation (because the dollar is the standard international currency) it shouldn't happen. The money won't lose its value. International goods will keep their prices in dollars, won't be an inflation on that side, so anything from outside won't get more expensive. Trillions has been suddenly printed, in 2008 and this year, without making a big change in how ex…
Stocks beg to differ.
The US has been hiding it's inflation for a while now. If you compare the quality of products vs the price of europe compared to the US, it's not even close.
I am not sure if I follow your logic about quality of products and what that has to do with inflation.
So the dollar burger is an illusion. The burger is actually $15, and is hyper inflated all along.