I mean, maybe. But this guy's rant is so high on hyperbole and scare quotes it's hard to even pick out particular problems. When you get paragraphs like: it's really hard to figure out how to...
I mean, maybe. But this guy's rant is so high on hyperbole and scare quotes it's hard to even pick out particular problems. When you get paragraphs like:
"The wheel of karma has turned, The Tao is reversing, the banquet of asymmetric, non-linear consequences has been served and the Fed's godlike powers will be revealed to be as delusional as the "value" and "wealth" that's piled up in the balance sheets of the top 0.1%."
it's really hard to figure out how to engage with that.
I mean he's all but outright claimed that the fed will inflate the US dollar to the point it is unusable as a medium of exchange. To me that seems to be the real fantasy land in the article. I...
I mean he's all but outright claimed that the fed will inflate the US dollar to the point it is unusable as a medium of exchange. To me that seems to be the real fantasy land in the article. I don't think early 1970's style inflation austerity and market suppression are out of the question for the US, but I do think the US going full Zimbabwe is impossible.
The US doesn't have to have everyone running around with bricks of trillion dollar notes. But inflation is the only way out of a debt you can never pay down. We might see the dollar lose half its...
The US doesn't have to have everyone running around with bricks of trillion dollar notes. But inflation is the only way out of a debt you can never pay down.
We might see the dollar lose half its value every year for 10 years, for a final value of 1/1024th of what it is today. Your billionaires become millionaires, your millionaires become people with $1000, your unplayable trillions of government debt are now billions of debt that you actually can pay down from your tax revenues.
Everything costs 6% more each month, and everyone needs to get paid 6% more each month, which is inconvenient as hell but not an existential problem for the bulk of people with no savings anyway.
Yea, but those of us in that < $20,000 range (who worked at it for decades) get hurt real bad, going from a few months/years of savings to 0 real fast.
for the bulk of people with no savings anyway
Yea, but those of us in that < $20,000 range (who worked at it for decades) get hurt real bad, going from a few months/years of savings to 0 real fast.
That's still quite a leap. It's not at all clear how inflation might happen in the United States. Inflation happens when prices go up; it's an average. Price increases happen when people decide to...
That's still quite a leap. It's not at all clear how inflation might happen in the United States. Inflation happens when prices go up; it's an average. Price increases happen when people decide to spend and the supply isn't there. (We have had some shortages due to the pandemic, but it doesn't amount to an average price increase; the consumer price index is near zero.)
Monetizing the debt is done by exchanging treasuries for dollars and that doesn't automatically result in increased spending. A lot of government debt is held by institutions or even foreign countries that are saving money in risk-free treasuries for their own reasons. They aren't going to suddenly buy a lot of consumer goods.
To make inflation happen, either the country needs to fully recover from recession and overshoot, causing shortages, or supply has to collapse, or people need to start panic-buying as a way of life, and none of those seem likely in the US. (Stocking up on food and toilet paper stopped once people had enough.) Instead, people who are worried about their income tend to do the opposite, slowing down whatever spending they can.
There is probably some limit on the world's appetite for US dollars but it's hard to tell what it might be.
I mean, maybe. But this guy's rant is so high on hyperbole and scare quotes it's hard to even pick out particular problems. When you get paragraphs like:
it's really hard to figure out how to engage with that.
I mean he's all but outright claimed that the fed will inflate the US dollar to the point it is unusable as a medium of exchange. To me that seems to be the real fantasy land in the article. I don't think early 1970's style inflation austerity and market suppression are out of the question for the US, but I do think the US going full Zimbabwe is impossible.
The US doesn't have to have everyone running around with bricks of trillion dollar notes. But inflation is the only way out of a debt you can never pay down.
We might see the dollar lose half its value every year for 10 years, for a final value of 1/1024th of what it is today. Your billionaires become millionaires, your millionaires become people with $1000, your unplayable trillions of government debt are now billions of debt that you actually can pay down from your tax revenues.
Everything costs 6% more each month, and everyone needs to get paid 6% more each month, which is inconvenient as hell but not an existential problem for the bulk of people with no savings anyway.
Yea, but those of us in that < $20,000 range (who worked at it for decades) get hurt real bad, going from a few months/years of savings to 0 real fast.
That might well be a feature to policy makers. They don't want you to have unused cash sitting around, they want you spending it.
That's still quite a leap. It's not at all clear how inflation might happen in the United States. Inflation happens when prices go up; it's an average. Price increases happen when people decide to spend and the supply isn't there. (We have had some shortages due to the pandemic, but it doesn't amount to an average price increase; the consumer price index is near zero.)
Monetizing the debt is done by exchanging treasuries for dollars and that doesn't automatically result in increased spending. A lot of government debt is held by institutions or even foreign countries that are saving money in risk-free treasuries for their own reasons. They aren't going to suddenly buy a lot of consumer goods.
To make inflation happen, either the country needs to fully recover from recession and overshoot, causing shortages, or supply has to collapse, or people need to start panic-buying as a way of life, and none of those seem likely in the US. (Stocking up on food and toilet paper stopped once people had enough.) Instead, people who are worried about their income tend to do the opposite, slowing down whatever spending they can.
There is probably some limit on the world's appetite for US dollars but it's hard to tell what it might be.
I mean, considering Trump's Fed chair isn't out until at least 2022...
I don't see how that matters? The Fed seems to be doing their job fine and I haven't seen any signs that their independence is threatened.
You're assuming neither Trump nor Putin have dirt on Powell.
That's speculation, not evidence, and again, how does it matter? The Fed publicly announced what it's doing.