Inflation isn't coming until the FED goes from "lending powers" to "spending power". QE is NOT money printing. We are about to have a massive deflationary event.
The FED, through QE, creates reserves on behalf of the banks in exchange for debt. Member banks use their own liquidity to buy debt. That debt is then "sold" to the FED but instead of giving the "money" to the banks, they place it in reserves on behalf of the bank. Those reserves are NOT legal tender. They cannot be spent!
Even when corporate bonds wind up on the FED's balance sheet, they still have to be serviced! It's not like the FED forgives the debt. So this idea that corporations or the government is getting money created out of thin air is ridiculous. Reserves are created out of thin air. Money is lent into existence. Even those credit facilities are loans using special purpose vehicles designed to bypass primary dealers.
The FED does not have the power to spend directly into the economy. Powell mentioned this the other day. The FED can only create reserves to be lent against. If there is no lending, in excess of repayment, there is no money being created. Money is destroyed when loans are repaid. In a debt based economy, debt must expand beyond repayment for "growth" to occur.
When we borrow, money is created in the economy, when the government borrows, they do so from existing dollars, thereby shrinking the amount of liquidity in the system. That is deflationary. QE is deflationary (see the link below from the St. Louis Fed).
Bank lending standards are at ’08 levels despite what may hear in the news. //fred.stlouisfed.org/series/DRTSCILM
The reason QE "worked" before is because everyone believes it's inflationary. That causes people to spend and borrow. Powell even said the other day, "Forward Guidance is our most powerful tool." i.e. "Getting you to believe something is our most powerful tool".
QE is not going to work this time. What will? Making those bank reserves legal tender!
In order for the FED to actually create money and spend, the laws will have to change. For congress to change those laws, they will need a historic monetary crisis.
The FED needs an massive deflationary event so congress can sell this (reserves becoming legal tender) to the public. The real crash is coming. My guess; congress/Trump/Senate will be blamed before the election. Biden will go after a long and volatile contest designed to stoke rage and division in the population. And then they hand everything over to the FED. The public narrative of the democratic party is one of social and/or welfare spending. Many of the bills introduced in March ( see below) are designed to replace lost GDP and cause massive inflation.
The FED, through negative rates, will phase out paper accounts and absorb the private sector banking system (see IMF paper link). All banks will become an extension of the FED through “FED Now” and “FEDaccounts”. In that bill, banks and credit unions are reimbursed for their expense of setting up these accounts and being an extension of the FED. In rural areas, lacking banks, the post office will be used.
I couldn't hear your post over the sound this money printer is making haha brrrrr
William Foster
These new digital dollars that the FED creates will look and act just like the paper money in your bank account but later, after your paper money has dwindled away due to negative rates, the digital dollars can be programmed to expire or only work at "participating retailers". That way they can direct and control spending. If they want inflation to go up, they can cause your money to expire sooner.
In the bills below, once the FED is authorized to create money and spend, there will be free smart phones, WiFi, $2,000/mo UBI, no rent, no mortgage payments, no commercial loan payments and no credit reporting among other things. //www.imf.org/external/pubs/ft/wp/2015/wp15224.pdf //www.congress.gov/bill/116th-congress/senate-bill/3571/text //www.congress.gov/bill/116th-congress/house-bill/6321/text //www.congress.gov/bill/116th-congress/house-bill/6321/related-bills //www.stlouisfed.org/publications/regional-economist/third-quarter-2017/quantitative-easing-how-well-does-this-tool-work //frbservices.org/financial-services/fednow/what-is-fednow.html
doesnt this fed shit need chainlink to work? or they have their own private blockchain based systems? how do i get rich from this instead of getting more poor everyday. fuck man just when i had a nice headstart because of chainlink its all washing away cause of all this crazy shit.
When do you think they will introduce the digital dollar? In any case I think the US is waiting to see how the digital yuan is going to be implemented.
I think you're right bro, been listening to Steven Van metre on YouTube explaining why qe is deflationary, which makes sense.
Justin Anderson
Why the fuck are you chainlink retards so self entered you think everything needs you in order to function?
>durr yeah the world economy is gonna rely on a fat Russian coin with 70% of the supply in the hands of the creator
Dylan Murphy
nice bait lol
Joshua Rodriguez
Also you aren't going to get any good responses on here. But if I see this thread once I've read it all I'm happy to speak about how fucked we all are. I hadn't considered that they would use a forced covid economic dump in order to usher in the CBDC's. (I knew they released COVID so they can switch to it, I figured it would be more about how cash can spread the virus and such.)
Honestly this is much more diabolical than that desu
Good dump OP
Nicholas Gomez
If there is no inflation happening then how the fuck did I just spend 34$ on a large one-topping pizza and 15 chicken wings tonight?
Mason Richardson
why would this have anything to do with link other than crypto potentially being severed from fiat?
Charles Carter
because you're an idiot. you couldve made that meal for
Where does anyone find 15 chicken wings for less than 10$?
Elijah Scott
So in the short term, we're looking at deflation... >t.brainlet My understanding is that gives you your dollar more buying power, how would that create a crisis? I'm aware of inflated wheel barrow money, deflation sounds like a good thing... I was under the impression we needed a massive inflation event to knock out the national debt, obviously that would create a "crisis".
Camden Ross
Jesus fucking christ we're fucked. There has to be some way around this terrible fucking bullshit.
Dominic Davis
>no rent >no mortgage payments So the entire country is section 8? Who gets the houses then?
Hudson Hall
lol how new are you guy? have you thought about how this fednow shit works? forget about chainlink and research how that tech they are trying to introduce works. youll end up right back at chainlink.
I have lived my entire life in a country that has a permanent case of unfix-able inflation because of many factors. From my experience and without engaging into a discussion related to the measures taken by the Fed, I can tell you guys are going towards a really bad case of hyper inflation regardless. First your country is broke in debt, and they need to pay it by decreasing the value of the USD to the point it will cost the equivalent of a gallon of milk. Secondly as your country goes to shit, whether it's inflationary or deflationary, the rest of the world will stop demanding your precious dollars. The amount there is in circulation, both inside and outside the country, is already big enough to cause an inflationary shock, one that you can't stop once it begins. Yes there will be deflation but just for a time, the end game is inflation and this is inevitable as all fiat currencies eventually go back to their intrinsic value: $0
Nathan Gray
i think what hes saying is the crisis is coming before the deflation, maybe im wrong tho
Jacob Rodriguez
He's fucking wrong, we're about to experience massive inflation.
Michael Hill
Macroeconomics threads get plenty of good responses. Typically these kinds of threads have the best discussion on Zig Forums
Hunter Cox
Lmao link has been obsolete and will get rekt once flare goes live.
Jason Perry
please explain how?
Dominic Lee
So what you're saying is that I should buy silver and silver mining stocks? OK cheers mate.
Ethan Cook
>doesnt this fed shit need chainlink to work? Yes.
"If the American people ever allow private banks to control the issue of their currency, FIRST BY INFLATION, THEN BY DEFLATION, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.... I believe that banking institutions are more dangerous to our liberties than standing armies.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." - Thomas Jefferson
Xavier Gonzalez
brookings.edu/wp-content/uploads/2020/07/Design-Choices-for-CBDC_Final-for-web.pdf >In general, to improve performance and reduce execution (i.e., gas) costs, smart contract developers have found ways to make use of complex arrangements involving cryptographic evidence and minimally-trusted third parties. These includes “roll-ups”, or verifiable computing, which can accelerate the task of validating a blockchain.
James Lewis
The grocery store you fucking incompetent NEET. Does mommy still buy groceries and cook for you. If not move out of your overpriced liberal run retard city.
Jackson Carter
That quote is very cool and I agree but it's false, he didn't say it.
Joseph Jackson
We’ve had inflation for 10 decades retard. Why you think “income inequality” is a top 3 presidential issue and 1/3rd of millennials (before Covid) lived with their parents. Why do you think we don’t see 5$ foot long commercials anymore at Subway. 20$ was a good weekly salary was 100 years ago, today 20$ won’t even buy you two jimmy john sandwiches.
We’ve already had the inflation numbnuts. If we hadn’t had inflation already then nobody on Zig Forums would be bitching about Jews.
Wake the fuck up faggots. The government wants you on the wrong side of the compounding equation. They want you to be dependent on UBI and CONSOOM not save. The sooner you realize this the better off you will be.
Ethan Hill
The words “inflation” and “deflation” were invented after his lifetime. Shut the fuck up
Landon Morales
God fucking damn it, can you guys shut the fuck up about link. Just one thread without shitcoins, please? There’s 100 other threads, all day, everyday, about link.
Nolan Gonzalez
It's a good thing if we're talking about good money. When everyone is running around with years worth of debt, deflation will also multiply the debts, and ruin people and corporations. That's not necessarily a bad thing, as that would allow people who were more responsible with the money to take over after a period of crisis, but this usually gets resolved via the money printer going brrrrrrrrr
Alexander Rodriguez
Check those digits jogger
Blake Nelson
Calm down you sperging boomer. You clearly weren't paying attention to the context. If the original guy was talking about pizza and wings that he ordered at a restaraunt he clearly isn't talking about making his own pizza and wings for less than 10$. You're comparing apples to oranges and saying "see how inexpensive this apple is? Why would you ever think that oranges are expensive when you can get apples for such decent price?"
Daniel Russell
>We are about to have a massive deflationary event. This. First deflation crisis than hyperinflation will come after it.
Kayden Ward
So i should keep all my shekels in the bank then and not invest them right
Jace Lopez
Yes we will have a blow off top off hyperinflation but that’s just the end game of 100 years of massive inflation. Boomers love to say we don’t have inflation, inflation was in the late 70’s. Well things are still more expensive today than they were in the 70’s
Christopher Martin
Can you explain to me can't banks withdraw their excess reserves as cash from the FED account? I would assume that if they have more reserves than what is required they are allowed to withdraw the excess money. Else, what is the point of these reserves, and why would banks be selling bonds etc. to FED if all they get are useless reserves which they already have an excess amount and cant use for other than loans, which they don't want to give. This makes no sense.
