I've heard some one say to me that in the trickle down of money the top tier gets the best advantage as they don't feel the effects of inflation at the same rate in which people farther down the latter do.. I understand this.. but It seems at least to me that alot of the money hasn't showed up in in the inflation numbers.. I've heard someone say interbank lending and bank lending is locked up because there is no modivation to lend at the current rates and they tie their money up in investments.. is there a better way to explain this? Do i have this wrong? Can anyone clarify?
money locked up in banking never hits consumers
- Thread starter cdcaveman
- Start date
i was reading this last night.. Don't know how much of it is legit..
http://www.washingtonsblog.com/2013...ring-dust-instead-of-helping-the-economy.html
http://www.washingtonsblog.com/2013...ring-dust-instead-of-helping-the-economy.html
My question is how do bloated bank reserves from fed money printing result in anything good? the fed is evidently paying higher interest on bank reserves then the market is paying for that money, such that bank reserves build, and inhibit the money from trickling down and inflating consumer pricing?
they print money buy bonds to hold down interest rates.. then pay interest on reserves to keep the money from hitting the market... there has to be some really bad long term effects to this... all this money is locked up in banking reserves... complete market manipulation with fiat currency... I just don't understand how you slip out from under all that as the fed? inflation saves the day? AT WHOSE COST!
yes, the question is always, "Can you control inflation?" other than that fiats are really fun
At the cost of creditors getting terrible returns on their investment. A very important difference to this era of money printing is that the US has done it without increasing the velocity of money. So, no inflation.
As Mel Brooks once said: "It's good to be the King!"
this "era" of money printing? It's only an "era" if it ends.
How do you see it ending?
yes the velocity of money isn't increasing because the money never trickles through the economy, it gets tied up in bank reserves... I don't understand how that really resolves the issue.. the value of inflation is just then held up inside these bloated bank reserves.. Its like they are holding down interest rates and the money they used to do it is being restricted from use so there isn't inflation.. this doesn't happen in a vacuum...