Prices coming down?

[alex_sauvage]

Originally Posted by daletournier

I think he means national debt, not money printing, although "money printing is a big part of this debt. Without looking I believe US national debt was approximately 8 trillion in 2008, it's now 27 trillion, but theres alot more debt across the board than that even if you dont include unfunded liabilities.

In regards to interest rates have a look at the mechanisms that are keeping them low and also the misallocation of funds that are by product of artificially cheap money.

It's a little more complicated than your broad brush strokes would suggest....covid is just the great accelerator, the fundamentals were broken prior to covid.

I see the Davos meeting 2021 has been named "the great reset", why?

I understand that things are not that simple, but nothing accounts for saying that US printed more money in 1 months than in 200 years...this is just fearmongering. US debt went from 9 trillions in 2008 to 20 trillions in 2016 (not to be political &#128513, but nobody (almost) worried about it. Yes, there seems to be a lot of free money, but it does not reflect on inflation rate. Maybe because people getting those free money just have to spend them on food. I am not an economist but it does not seems to be a zero sum game.

[daletournier]

Originally Posted by alex_sauvage

I understand that things are not that simple, but nothing accounts for saying that US printed more money in 1 months than in 200 years...this is just fearmongering. US debt went from 9 trillions in 2008 to 20 trillions in 2016 (not to be political [emoji16]), but nobody (almost) worried about it. Yes, there seems to be a lot of free money, but it does not reflect on inflation rate. Maybe because people getting those free money just have to spend them on food. I am not an economist but it does not seems to be a zero sum game.

Actually it has resulted in alot of asset inflation it just hasn't flowed through to day to day stuff if government figures are to be believed ,yet I do question the way they measure inflation, which has changed over the years?

You have to look at where that money has been directed, where did QE go and what was the effect?

History suggests that debasement of currency by printing to much generally ends in lots of inflation, a theft of purchasing power, , will it happen this time? I dont know, it maybe different this time? do you solve debt problems with more debt?

All l do know is theres lots of shoeshine boys giving stock tips at the moment...that's concerning to me.

[Yihang]

Originally Posted by daletournier

Actually it has resulted in alot of asset inflation it just hasn't flowed through to day to day stuff if government figures are to be believed ,yet I do question the way they measure inflation, which has changed over the years?

You have to look at where that money has been directed, where did QE go and what was the effect?

History suggests that debasement of currency by printing to much generally ends in lots of inflation, a theft of purchasing power, , will it happen this time? I dont know, it maybe different this time? do you solve debt problems with more debt?

All l do know is theres lots of shoeshine boys giving stock tips at the moment...that's concerning to me.

I know people like to dismiss it but robinhood and all the ETF gurus on youtube really made this market totally unpredictable. Too many people going for momentum. AMD is at P/E ratio of 169.........i guess because new imac is using radeon graphics.....ok kids. Tesla is just hilarious. Elon twitted he think the stock is too high and then the next day it grew another 15%.

[ranchero76]

Here's link.
“The U.S. is about to experience one of the greatest inflationary periods in world history”

https://cointelegraph.com/news/us-pr...-two-centuries

[Yihang]

So buy a boat and some gold billions now and move to new zealand? Sounds pretty sweet。

China gave zero hand outs during this whole thing. Not sure how that's going to play out.

[longjonsilver]

What am i missing: government is what is authorized by a nation to print the money. No? So why do governments borrow money and have to pay interest on the borrowings?

Juz askin

[Yihang]

I think the point is to borrow from what is out in the market already. To avoid printing money because printing money inevitably devalues it........

I read somewhere people in China put 60% of their entire networth in banks. That is a whole **** load of real money to borrow.

[longjonsilver]

Originally Posted by Yihang

I think the point is to borrow from what is out in the market already. To avoid printing money because printing money inevitably devalues it........

I read somewhere people in China put 60% of their entire networth in banks. That is a whole **** load of real money to borrow.

So where did they get that money? Remember the government BORROWS money. So where did the money come from?

[Yihang]

Originally Posted by longjonsilver

So where did they get that money? Remember the government BORROWS money. So where did the money come from?

Selling bonds? Cos you buy it with your hard earned cash? I think China is the largest holder of US treasury bonds. EDIT: Quick google says japan overtook China last year.

During war time buying war bonds was a patriotic thing. But technically you are puting the country in debt?

Article on bonds
https://www.bbc.com/news/business-50504151


I know i have some aus gov bond ETFs because they have a decent rate at around 5%.

[alex_sauvage]

Originally Posted by ranchero76

Here's link.
“The U.S. is about to experience one of the greatest inflationary periods in world history”

https://cointelegraph.com/news/us-pr...-two-centuries

Thank you! So he is comparing 1$ in 1776 as equal to 1$ in 2020? While technically correct and makes for flashy headline , it is somewhat dishonest. US was borrowing money at pretty steady rate since 2000, but everybody would agree that economy was doing rather well for the last 6-7 years prior to Covid.

[daletournier]

Originally Posted by longjonsilver

So where did they get that money? Remember the government BORROWS money. So where did the money come from?

Its borrowed into existence. Look into fractional banking.

[daletournier]

Originally Posted by Yihang

Selling bonds? Cos you buy it with your hard earned cash? I think China is the largest holder of US treasury bonds. EDIT: Quick google says japan overtook China last year.

During war time buying war bonds was a patriotic thing. But technically you are puting the country in debt?

Article on bonds
https://www.bbc.com/news/business-50504151


I know i have some aus gov bond ETFs because they have a decent rate at around 5%.

I think the US people are the biggest holder of US debt, they were when ai looked last.

[wolfgal]

Originally Posted by longjonsilver

So where did they get that money? Remember the government BORROWS money. So where did the money come from?

i'm a newb at this but have been reading up. trying here. please forgive me if i get something wrong:

money is digitally invented by the fed. the head of the fed (spokesperson, if you ask me) is Powell. Powell basically works for trump, but the fed itself is a private institution made up of international central banks..., which means that it plays a role with the dollar being the world's reserve currency. i think the fed was invented in the 30's. not sure it was mentioned in the constitution.

the fed invents money and gets it out there buy technically buying assets, junk bonds, all kinds of things... this is usually called quantitative easing but there are other ways that the Fed can control flows of money (like raising or lowering the interest rates, controlling yield control curves, etc). a metaphor for this could be putting grease on the mechanical parts of a financial system so that the whole thing does not freeze up and go into gridlock

a lot of money has been printed, but


the two ways it flows out is through monetary policy and fiscal policy, two very different levels.

While the money involved in monetary policy tends to stay at the top (with the cream percentage), Fiscal policy involves the stimulus cheques, etc and serves to keep people in their homes and enough food on their plates for a while... it also helps small businesses, etc.

it is fiscal policy that serves to prevent civil unrest in the us

basically, monetary policy keeps the bigger economy ticking over: big companies get bailouts and can buy back their stocks; big banks get reserves in case the derivatives market blows up in their face (when all kinds of debts are not getting paid)... and ultimately helps the US preserve the status of the dollar as the reserve currency. this is a big deal and probably the reason why the Fed has said they will print to infinity

the fact that, due to the distribution channels, this "printing" doesn't really help on the ground all that much is a real big problem. you may have noted how Powell has been begging congress to make some FISCAL decisions. this means that Powell has noticed that this money, this liquidity is not really getting to mainstreet where mom-n-pop businesses are shutting down, companies are laying people off, where folks are not able to pay rent/mortgages and are standing in food lines, etc.

the difficulty with the way this money flows out has also deepened the wealth gap like never before. even before c-19 hit, 81 percent of all of the globe's resources and wealth was owned by 11 percent of the globe's population. an outgrowth of the printing is that that 11 percent have much, much more now...





wolfgal

[Yihang]

Yeh true. Everyone's 401k....there you go your country literally owes you. But then again you probably owe the government 140k in student loans.

[daletournier]

Originally Posted by alex_sauvage

Thank you! So he is comparing 1$ in 1776 as equal to 1$ in 2020? While technically correct and makes for flashy headline , it is somewhat dishonest. US was borrowing money at pretty steady rate since 2000, but everybody would agree that economy was doing rather well for the last 6-7 years prior to Covid.

I wouldn't agree with that at all! Once again you need to look deeper. The longest economic expansion in US history, yes BUT also the weakest or one of the weakest ,certainly the most propted up.

Without QE 1-3 and other stimulus the economy would of collapsed, let's not forget historically low interest rates for a decade. The Fed tried to unwind its balance sheet and just couldn't do it. The economy has been on life support since 2008, more so now.