How is it possible to print money like hell and cause no inflation
- Thread starter misterno
- Start date
Because contrary to what the gold bugs would like you to believe, most of the money being printed is not getting into the money supply in the American economy. First, it is plugging big giant holes in bank balance sheets. So a good portion is basically replenishing bank reserves for bad loans and assets that have permanently devalued.
Second, a good portion is also going to foreign banks for the same reasons.
Third, look at the crisis the Euro is in right now with Greece? So the demand for Dollars is actually increasing around the world. This provides another "outflow" of this money being printed going into foreign hands.
Combine that with a change in consumer habits by many Americans, and you have the recipe to NOT have inflation.
The above post is excellent. I would add that the current money printing is basically offsetting the massive deflation that hit worldwide. So, in reality it was a huge transfer of wealth from small businesses, and middle class, to anyone with access to global debt and equity markets...ie, multinational corporations and banks.
Great post. Exactly. And, as stated the money has directly been "put to work" in equities/bonds. Is there money making it's way to Main Street?Quote from tradestrong:
Because contrary to what the gold bugs would like you to believe, most of the money being printed is not getting into the money supply in the American economy. First, it is plugging big giant holes in bank balance sheets. So a good portion is basically replenishing bank reserves for bad loans and assets that have permanently devalued.
Second, a good portion is also going to foreign banks for the same reasons.
Third, look at the crisis the Euro is in right now with Greece? So the demand for Dollars is actually increasing around the world. This provides another "outflow" of this money being printed going into foreign hands.
Combine that with a change in consumer habits by many Americans, and you have the recipe to NOT have inflation.
you are all fools
and soon you will see why
and soon you will see why
The inflation is caused when too much money is chasing too few goods. In current environment industry utilization is only 70%, far from full running capacity. This keeps inflation under control plus people are saving more instead spending.