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When Inflation Wipes out a Country's Currency...
- Thread starter zghorner
- Start date
The central bank has no fiscal policy, other than the one that concerns its own day to day operations. It typically makes a net profit which flows directly back to the Treasury. In the U.S., the Congress, not the Central Bank, determines how much spending shall occur, and on what. The Central bank has no control over how much new outside money they create. The amount of new outside money created is determined by the amount of the deficit, if any. The deficit is determined by Congress when it decides how much to spend and how much to tax, although at the time spending and taxing are determined the amount of deficit that will result is inaccurately known.. In the event federal revenues exceed federal expenditures, a net decrease in outside money in the private sector occurs. This is why surpluses repeated too often or created in too large amounts are expected to result in deflation and recession.Inflation is the implication raised due to imbalance between the fiscal and monetary policies of a central bank.
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Nobody here talking about Japan. They were the leader way back with money printing, massive sovereign debt, debasing currency, ultra dovish central bank policies...etc They have lead this road and they had a massive real estate bubble and crash before ours. They never recovered from the consequences for any of these events. Poor market performance, low real estate values, massive conglomerates being propped up by their central bank. Mostly monopolistic based corporations with low stock values and boring earnings. Japans foolish monetary policies led directly to Chinas emergence as a manufacturing super power.
so, now with massive imported inflation via commodities they do not produce and supply disruptions from (unfriendly nations). They now have the worst kind of inflation and still trying to stay the dovish route...because if they do raise interest rates (without holding a reserve currency), every hike will cause untold debt servicing costs and each round of printing at these levels causing massive instability in the yen...its just a matter of short order till the Yen begins 10% drops each quarter and the economy goes into a depression. The EU probably follow the same route with the euro after a period of time...same scenario. The fully socialist EU's foolish monetary policies led directly to Russia becoming a debt free, sole commodity provider and a re-born post communist superpower.
Nations that have built their strategy upon massive sovereign debt, abnormally low interest rates and money printing...yet have no real manufacturing or commodity base and have high labor costs and high cost social aid programs.
so, now with massive imported inflation via commodities they do not produce and supply disruptions from (unfriendly nations). They now have the worst kind of inflation and still trying to stay the dovish route...because if they do raise interest rates (without holding a reserve currency), every hike will cause untold debt servicing costs and each round of printing at these levels causing massive instability in the yen...its just a matter of short order till the Yen begins 10% drops each quarter and the economy goes into a depression. The EU probably follow the same route with the euro after a period of time...same scenario. The fully socialist EU's foolish monetary policies led directly to Russia becoming a debt free, sole commodity provider and a re-born post communist superpower.
Nations that have built their strategy upon massive sovereign debt, abnormally low interest rates and money printing...yet have no real manufacturing or commodity base and have high labor costs and high cost social aid programs.
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Japan is another country, like the U.S., with no real debt. In fact in recent years Japan's Central Bank bought back almost 50% of the JGB's previously sold.Nobody here talking about Japan. They were the leader way back with money printing, massive sovereign debt, debasing currency, ultra dovish central bank policies...etc They have lead this road and they had a massive real estate bubble and crash before ours. They never recovered from the consequences for any of these events. Poor market performance, low real estate values, massive conglomerates being propped up by their central bank. Mostly monopolistic based corporations with low stock values and boring earnings. Japans foolish monetary policies led directly to Chinas emergence as a manufacturing super power.
so, now with massive imported inflation via commodities they do not produce and supply disruptions from (unfriendly nations). They now have the worst kind of inflation and still trying to stay the dovish route...because if they do raise interest rates (without holding a reserve currency), every hike will cause untold debt servicing costs and each round of printing at these levels causing massive instability in the yen...its just a matter of short order till the Yen begins 10% drops each quarter and the economy goes into a depression. The EU probably follow the same route with the euro after a period of time...same scenario. The fully socialist EU's foolish monetary policies led directly to Russia becoming a debt free, sole commodity provider and a re-born post communist superpower.
Nations that have built their strategy upon massive sovereign debt, abnormally low interest rates and money printing...yet have no real manufacturing or commodity base and have high labor costs and high cost social aid programs.
You have a vivid imagination.
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