Biden's best speech -- new

[Ricter]

many people getting stimulus don't need it and it WILL go to share prices or Robinhood accounts. If you're unemployed or below 40 hours a week, you should get a stimulus check. If you're not, you shouldn't.

Agreed. The aid should be dis-aggregated. (Like GDP reporting.) But the system is designed to move money efficiently upward, not downward.

 

[Tsing Tao]

Which rises with a stronger economy.

The impact of a stronger economy is nothing compared to that of money supply.

 

[Tsing Tao]

If that's true then what money did they use to make stock buybacks? They used money they would have given to the federal government.

No they didn't. They borrowed. If a company's Weighted Average Cost of Capital (WACC) contains a significant equity stake, they will borrow at historically low interest rates and swap equity (which has a much higher cost of capital). This will drive down the WACC accordingly.

The tax game has little to nothing to do with share buybacks.

 

[Ricter]

The impact of a stronger economy is nothing compared to that of money supply.

You shuold have dis-aggregated your replies to me, so that I could like the ones I like. Dis-aggregate your Gross Daily Postings.

 

[Tsing Tao]

You shuold have dis-aggregated your replies to me, so that I could like the ones I like. Dis-aggregate your Gross Daily Postings.

Hey man, I had one post to you and you made it into different ones!

 

[Ricter]

Hey man, I had one post to you and you made it into different ones!

Oh yeah.

I"m not arguing that point about money supply, by the way, because I see the wagon wheel getting too close to a deep rut again. Government money printing is bad (you, or was it jem, ah the good times!) vs. by far most money is "printed" by the private sector via collateral debt chaining (me). We've danced that one too many times.

 

[Tsing Tao]

Oh yeah.

I"m not arguing that point about money supply, by the way, because I see the wagon wheel getting too close to a deep rut again. Government money printing is bad (you, or was it jem, ah the good times!) vs. by far most money is "printed" by the private sector via collateral debt chaining (me). We've danced that one too many times.

I think the "money printing" now is different than when you and I first got into it back in the days of Obama and Bernanke. It's taken on a whole new life now.

 

[UsualName]

How much of the new money is actually in the economy and not being hoarded?

New money doesn’t necessarily create inflation.

 

[Tsing Tao]

How much of the new money is actually in the economy and not being hoarded?

New money doesn’t necessarily create inflation.

Sooo...just so I'm clear, you think that the creation of money isn't going to the assets market but is being "hoarded" at essentially zero interest in some...mountain of cash somewhere?

 

[UsualName]

Sooo...just so I'm clear, you think that the creation of money isn't going to the assets market but is being "hoarded" at essentially zero interest in some...mountain of cash somewhere?

No, not necessarily but sometimes it does pay to hold cash. My point is that looking at purchasing power and inflation in relation to new money doesn’t tell the whole story. Not every dollar is moving through the actual economy.

Also, we are seeing lots of goods and services get a lot cheaper through automation or specialization. There are a lot of other market forces that need to be considered beyond “brrrrrrrrr.”