Prices coming down?

[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