51–60 of 327 posts
Can someone explain to me why central banks find it so hard to create inflation? It seems to me that the difficult direction should be convincing people that your currency is worth something. Making your currency lose value should be easy, shouldn't it? If Google wanted to tank their share price they would have no problems.
Can someone explain to me why central banks find it so hard to create inflation? It seems to me that the difficult direction should be convincing people that your currency is worth something. Making your currency lose value should be easy, shouldn't it? If Google wanted to tank their share price they would have no problems.
Earlier quoted context omitted.
> ... when the German Saver is who would benefit if they decided tomorrow to run deficits for the next 10 years. The German Saver knows better than most that inflation destroys savings. Inflation benefits debtors by allowing them to pay back their loans in depreciated currency. Germany isn't exactly a nation of debtors, although most of Europe is. This is a looming political issue that's only just beginning.
Savers are bad for the economy at large though because they don't invest in high risk businesses, but rather in low risk assets (RE, bonds, etc) that do nothing for no one. They're like scrooge mcduck swimming in their pile of gold.
Earlier quoted context omitted.
> ... when the German Saver is who would benefit if they decided tomorrow to run deficits for the next 10 years. The German Saver knows better than most that inflation destroys savings. Inflation benefits debtors by allowing them to pay back their loans in depreciated currency. Germany isn't exactly a nation of debtors, although most of Europe is. This is a looming political issue that's only just beginning.
Savers are bad for the economy at large though because they don't invest in high risk businesses, but rather in low risk assets (RE, bonds, etc) that do nothing for no one. They're like scrooge mcduck swimming in their pile of gold.
But seriously, there’s no harm damping things a bit. Runaway growth can have its issues too. I reckon best is to keep your inflation just ahead of population growth.
https://medium.com/@b.essiambre/the-world-deserves-a-pay-rai...
Can someone explain to me why central banks find it so hard to create inflation? It seems to me that the difficult direction should be convincing people that your currency is worth something. Making your currency lose value should be easy, shouldn't it? If Google wanted to tank their share price they would have no problems.
It's a tiger that you don't want to let out of the cage.
Earlier quoted context omitted.
> Europe is at their end of Monetary policy I genuinely wonder why you believe that? Everything points to the status quo.
The ECB is currently at a -0.5% deposit rate. The SNB is at -0.75%. Perhaps there is room to go down, but the banks are struggling and pushing back.
Can someone explain to me why central banks find it so hard to create inflation? It seems to me that the difficult direction should be convincing people that your currency is worth something. Making your currency lose value should be easy, shouldn't it? If Google wanted to tank their share price they would have no problems.
So central banks try to counter that: "Your money will be worth less in the future, so spend it now. Or make an investment that will produce returns greater than the rate of inflation." So they spend their money, creating demand, and jobs materialize (hopefully) to fill that demand.
For the last decade-plus we've had a combination of anticipation of disaster, and banks flooding the system with cash to assuage that fear. That's like pressing both the accelerator and the brake as hard as you can -- you don't go anywhere until suddenly something gives, and then the entire thing goes to hell in a handbasket right quick.
When? If I knew that, I'd be rich. The general advice is that the market can remain irrational longer than you can remain solvent.
Earlier quoted context omitted.
This is absurd in the context of Germany. They have a fetish with "fiscal responsibility". It'd be the natural inclination of every politician to cut back on deficits (and I imagine within a few years there'd be pressure to). Germany is a country with a broken military and infrastructure. They should spend money on that. They should cut taxes for workers. There's plenty of shit for Germany to spend money on, and it w…
I really hate this idea that everyone needs to just constantly be spending. It's useful but there is nothing wrong with having a slow stable fincal conscious ecconomy.
Earlier quoted context omitted.
This is absurd in the context of Germany. They have a fetish with "fiscal responsibility". It'd be the natural inclination of every politician to cut back on deficits (and I imagine within a few years there'd be pressure to). Germany is a country with a broken military and infrastructure. They should spend money on that. They should cut taxes for workers. There's plenty of shit for Germany to spend money on, and it w…
I really hate this idea that everyone needs to just constantly be spending. It's useful but there is nothing wrong with having a slow stable fincal conscious ecconomy.
Because the way you get that is by spending on it.