So here's what I do understand >FED does QE >FED buys Treasuries from banks >The money the FED pays the banks is stored in Federal Reserve accounts >The Bank now has increased reserves to lend against (they can lend out more money) >The banks are not required nor compelled by any law to actually lend out these increased reserves
That being said, why are the only things showing evidence of inflation >student loans >housing prices >medical costs >stocks
Ultimately, I don't understand what drives the rise of equity/asset prices in this environment and why the money doesn't spill over into the plebian economy.
In lieu of actually explaining, if you have any good sources that I can read about it, I'd appreciate it.
the money does flow to mainstreet. mainstreet then puts into thier favorite ponzi scheme known as the stock market
Christian Adams
Monetary side inflation is driven by devaluation of the USD through printing hence the rise in real estate, gold, btc, etc. Conversely, the real economy is in its own realm since, firstly, a large portion of monetary stimulus never even hits mainstream, and secondly, traditional inflation (think economy heating up supply+demand etc) is nonexistent and has been for over a decade now because this countries economy is basically dead after 2007. Not to mention government subsidies and globalism (manufacturing made cheaper) offsetting the price of common goods. So in the end you have the main street economy stable while the money supply inflates and creates asset bubbles. Our tomatoes and cucumbers stay "the same" but really were getting poorer by the year to the tune of however much the fed is printing.
Liam Bennett
>medical costs
medical has a cartel on regulation. No you cant be your own doctor, they created a law that says you can't. even know 90% of doctor visit the person knows exactly what is wrong with themselves by googling before they go
Noah Baker
>devaluation of the USD ahhh i get it. so it looks like things are getting more expensive, but the dollar is actually just becoming increasingly worthless.
Matthew Russell
Food prices have gone up 25-50% in the past year where I live.
Nathan Allen
>The Bank now has increased reserves to lend against (they can lend out more money) The banks have a zero reserve requirement. They can lend out infinite money with no reserves now. >federalreserve.gov/monetarypolicy/reservereq.htm
Nolan Butler
also, what indicators/"numbers" are used to assess the increasing worthlessness of the dollar and therefore appraise prices at their new "higher" dollar values? (if you know)
Ayden Brown
If that's true, then why do they even tighten lending standards? Is it to force the FED to be a QEcuck eternally?
this whole thing is just a house of cards it seems
Cooper Collins
just zoom out and look at it from a country level. anything that must be imported or is subject of foreign investors goes up.
Christian Harris
what is imported into the usa? i only consume american products
Hudson Green
because none of the money of QE go into circulation, they simply buy bonds to pump their value and lower their interest rates.
its just like how you can use BTC to pump shitcoins and the total market cap of crypto goes up even though you have the exact same crypto in circulation and no real dollars were spent
>realizes it's a house of cards New around here huh?
Hudson Hall
There is no one number. In the current system everything is floating against everything else, however some things have more 'inertia' than other. It is generally true to say that the rise in gold prices (for example) is measuring the loss of purchasing power of fiats, but the value of gold does also fluctuate against other tangible assets.
Jackson Peterson
s-so do you know why gold isn't exploding in price??
Easton Ortiz
>because none of the money of QE go into circulation, they simply buy bonds to pump their value and lower their interest rates.
bond market and stock market are a 100 trillion dollar ponzi scheme. that keeps the money off mainstreet. hyperinflation hits once those ponzi schemes come to a end and people switch from a dollar reserve currency to BTC
Blake Phillips
because central banks arent buying more gold than usual
Isaiah Rodriguez
gold is the canary in the coalmine, so much is done behind the scenes to keep the price down - gold always defeats currency printing in the end though. every time through history.
another answer is that we have been in a secular bear market within the main PM bull market that started in 2000, but it's done with now and we're starting the final leg of the bull market now - dollar may not survive this time. the chart of this bull market is almost identical to the one from the 70s/80s, but playing out over a longer timescale, and several times bigger in magnitude
Jeremiah King
And portions keep getting smaller
Jason Carter
Look up Michael Saylor's recent interviews about Bitcoin and why he put all of his companies half a billion treasury in it.
True inflation is 7% on a good year (google the Burrito Index). With the Fed currently targeting twice that, we will see 10-15% inflation. People aren't financially educated and the Fed never posts true inflation numbers. They release CPI numbers that are a carefully selected grouping of assets that don't inflate by design. Technology is deflationary (see Jeff Booth).
>That being said, why are the only things showing evidence of inflation
Importantly, these are the things that matter. As Saylor mentions, the most important thing you can buy is an annuity stream (retirement). Through inflation, the cost of retirement has become unaffordable. The Fed doesn't track these types of things for good reason. If more people knew what true inflation was, it would be a risk to the current system of the fiat system where the Fed can print more money.
Another important aspect is that things change over time. The boomer generation had cheap real estate, equities and bonds they could invest in and build a retirement with. The current generations can no longer invest in bonds, equity prices have skyrocketed, real estate has exploded, etc.
That's why things like UBI are legitimately on the table now, not for political reasons but because the system has become unsustainable.
yea but it doesn't seem like this is going to happen unless the rest of the world dumps the dollar sauce? ok ill check it out ty
Robert Robinson
If you wanna know real inflation just look at the cost of a mcdouble at mcdonalds.
>10 years ago: $1.56CAD after tax >Today: $2.56CAD before tax
Cooper Miller
I also suggest RealVision, they have hundreds of interviews with hedge fund guys and experts in their respective fields.
Taxation isn't theft, you need public goods. Inflation is theft.
Jason Watson
because we are not eating or driving more. we are eating and driving the same amount as before. what we do with our extra printed dollars is buy stocks and real estate.
Charles Rogers
because gold is shit that nobody takes seriously
Andrew Cooper
Because everyones throwing it into stocks and usd is world reserve. The moment everyone goes "no thx we're using china currency" i mean be real theyre clearly gonna take over the world. At that point this the usd goes zimbabwe tier.
Jonathan Brown
>China See Peter Zeihan. The talking point where China is taking over the world is hugely ironic. They are doomed and will see huge population "corrections".
Luis Sullivan
Deflationary aspects of the economy such as;
1. Immigration. A greater labour pool willing to work at shit tier wages.
2. Outsourcing. The cost of production in another country means that profit margins for large companies remain fat.
3. America's currency is the world reserve currency. Basically, America is going to issue dollars like it's candy until such time as another country confronts it militarily or economically.
Britain did the same thing. All of the interwar years in the 1920s and 1930s was Britain coasting of it's de facto position of the reserve currency of the Pound. The house of cards came collapsing down in WW2 and it's never been a sovereign country since then.
Jaxson Clark
you're missing an important factor here which is production costs actually getting cheaper thanks to more chemistry and economies of scale When you factor that as well, the cost is actually much higher. In other words if the current mcdonalds was given the facilities and technology of 10 years ago, making the exact same product that they were making back then but selling it in 2020, they'd probably go bankrupt unless they sold it at more than $4. Technology has a deflationary effect on prices which is why everything around us still hasn't blown out of proportions to the point that it's unaffordable to the majority of people. To prevent this effect the companies simply use technology to downgrade the product and keep its price down. Real estate is affected by this specifically. Have you ever wonder why exactly are all new houses built out of unreliable trash with unreliable techniques? And even then they're unaffordable again.
Cameron Brooks
China is in a position similar to the USA in the late 19th and early 20th century.
The USA is like the British Empire. Hell, it could be argued that it's a continuation of the British Empire given it's territorial responsibilities.
The misguided gooks in Hong Kong weren't flying the Union Jack after all. It was the ol' stars and stripes.
Jordan Green
>thinks Fed is an acronym Didn't read. Retard opinion discarded
