What are the repercussions of unlimited printing?
- Thread starter hafez50
- Start date
Oh yes, Brent Johnson from Santiago talks every now and then with George. I think George does a good job of bringing on lots of people and getting a nice varied opinion.
https://www.youtube.com/channel/UCpvyOqtEc86X8w8_Se0t4-w/videos
Good vid. Bit confusing tho, that some of the footage he's using , is from prior to the death of gold standard.
The US isn't printing money. It is borrowing money. Big difference. It is what Japan has been doing for over a decade. As long as the US pays back the debt and doesn't default, this will not be inflationary. More likely, deflationary.
Inflation comes when debt is excused and those borrowing say "hey let's put on more debt cuz we don't need to pay the old debt back"
Inflation comes when debt is excused and those borrowing say "hey let's put on more debt cuz we don't need to pay the old debt back"
Yeah, there is consequence. It basically destroys the middle class and the powerful of consumption.
Ten years ago, the minimum wage in New York City as I recalled was $6.75. Now the minimum wage is $15.00. Also ten years ago, if you bought a house in a good neighborhood for less a million dollars in NYC, now it is worth $3 to $6 million.
Many retirees living in these areas are forced to moved out because they are no long able to afford living in these areas. Their social security yearly increment adjustment received from government is minuscule. It is only adjusted one or two percent a year and many of them don't live in rental control housing.
All in all, it boils down to lifestyle. If you had made $100,000 ten years ago, now you have to make at least $200,000 to have the same lifestyle as before in the city. Most of the people I know working in the city make the same salary as ten years ago except software developers. Many of them can't afford to live in the city anymore. They have left to the suburbs near NYC. It is much cheaper living in suburbs. My cousin bought a new condo in NJ near NYC recently for only $600,000, but he commutes to work in NYC.
Everything is relative. Other nations also have the same problem too. They print out too much money. The more money they print out, probably the less things people will buy. This all leads to massive decrease in consumption power and impoverishment for many people especially the middle class.
The rich has hard asset. They are safe.
If you don't have hard assets like house or stocks, probably your lifestyle will degrade very fast in couple years. It seems the feds and the government are very desperate now. They are trying to inflate the economy back on its track. Last two months, they adds couple trillions to the economy.
With INFLATION, you need only raise the damn interest rate. But with STAGFLATION, you're pretty much screwed, especially when the interest rate is already at zero. That's what we'll be up against IMO.
To quote Gundlach, it's like jumping out of a window on a 90th floor of a building. For the first 89 floors, everything is fine and the experience is quite exciting.
The recent $2T, - from who, did they borrowed it from ?
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Q: Will the U.S. Treasury Department have to print $2 trillion in dollar bills to pay for the stimulus?
A: Not exactly. Treasury doesn't have to print all those greenbacks because it can simply borrow the $2 trillion from investors by selling U.S. government bonds. The money that investors use to buy the bonds could come from their cash accounts, but more likely it will come from selling other investments, like corporate bonds.
The challenge comes when that $2 trillion Treasury bond sale siphons money away from other essential lending markets, including blue-chip corporate bonds — that makes it more expensive for all kinds of companies and local governments to borrow.
This is where the Federal Reserve comes in. The U.S. central bank has vastly expanded its purchases of various bonds in recent weeks as the coronavirus crisis weighs on the economy and strains our financial system. Last Monday, the Fed publicly called its latest bond buying plans "unlimited." For instance, it is buying at least $300 billion in corporate bonds and other securities tied to assets like real estate and auto loans, propping up their long-term value as investors exit those markets for the presumed safety of government debt.
Thank you for expanded answer @eastern_warrior , yet,
it doesn't look like it came from bond sales.
This guy has a big wallet, maybe he helped.
Tho his servants always run out of money and asks for more.
It also might be, that i haven't properly read-in your answer and placed myself in a position of a stupid noob.
Pardon if so.
it doesn't look like it came from bond sales.
This guy has a big wallet, maybe he helped.
Tho his servants always run out of money and asks for more.
It also might be, that i haven't properly read-in your answer and placed myself in a position of a stupid noob.
Pardon if so.