Modern monetary theory stipulates that taxes drive demand for currency; giving it value. tl;dr: people need to pay taxes == people need the currency == demand == value.
Now: the Federal reserve are increasing the amount of money in the system, via unlimited QE. The fed will now also directly buy bonds and other debt from the private sector, rather than going through banks. Also, banks now have the ability to lend money with 0% reserve.
How will all of this new economic change affect the economy? My gut tells me serious inflation. By increasing the amount of money in the system -- how can serious inflation be avoided? The MMT answer to that (as far as I can tell) would be to raise taxes, to help eliminate some of the money that has been created.
The FED is not just printing money and injecting it into the economy like BRRRR. For the most part, they are buying treasury notes which need to be paid back/interest needs to be paid on them. As they are paid off, the money comes back the FED and can be eliminated.
However; with such huge amounts of money being added to the system, won't that cause inflation regardless? Also, if there's no growth but there's still extra money being added - doesn't that *also* lead to inflation? This is directly going to hurt the average American imho.
PS: I'm not an economist, just a spectator from across the pond.
Can you explain how what you just described is *not* printing money? The fed are also going to start buying corporate bonds as part of the stimulus package, IIRC.
Camden Gray
what happens when they can't be paid back?
Jack Barnes
Bumping with females holding currency, waiting for ANSWERS.
i bought eggs at like 30% premium a couple days ago already. inflation is already here, theyre using hoarding as the short term reason but the prices wont drop. u either have to invest in something with the money you have go into ddebt or eat the inflation losses
Grayson Diaz
what you don't understand is that yes, massive stimulus will cause inflation, but 2 trillion isn't massive. it just sounds massive cuz muh big number. but it would actually take an amount 100x that to cause actual inflation that would start to impact our lives in a meaningful way.
basically if taxes are not increased then inflation
Connor Jackson
those are men, OP
Liam Walker
show me evidence that eggs in your area went up 30%, because i don't believe you
Luis Fisher
borrow more to pay of the borrowing
Luke Flores
This man gets it. Government can give out as much money as it wants to solve liquidity problems. But then it has to such it back up again and burn it, just like in crypto protocols. The other thing influencing inflation or deflation is trust in the system, just like crypto. The US Confederate army printed their own dollar, and it was accepted 1:1 with the union, until it started to become clear they weren't going to win. The US can now print as much money as they want if it means they can win the war, but when it becomes widely clear they aren't going to win, the USD will sink like a rock.
Brody Rodriguez
If the $6T in assets purchased by the Fed hasn't affected the economy, nothing will.
there are sales galore at my grocery store, went yesterday (except frozen veggies were all gone)
Xavier Parker
Go to a fucking grocery store retard
Adam Sullivan
It would need to be $30tn to be guaranteed massive inflation
Aiden Barnes
did you even read it? the chick was talking about how a 1.4t student debt cancellation just from printed money wouldn't harm the economy or increase inflation, but she doesn't really go into detail on the actual stimulus and whether or not that would cause inflation this is what happens when you have girls in high level jobs, seriously bluepilled take on the whole thing I bet she was the head of institutional lending at some point
Carter Lee
unless the demand for the currency increases by that much too
Jack Lopez
The demand for USD from the rest of the world exceeds even the currently planned print runs - and this will reduce inflation expectations: the world is betting that the United States will be the best placed nation for the After Plague.
However, once other countries get back on their feet, those printed dollars they bought will come back to the States like a tsunami. THAT’S when the inflation will hit, and very, very hard
Logan Phillips
>I bet she was the head of institutional lending at some point subtle kek
What? According to tradingeconomics.com/united-states/money-supply-m1 -- the total M0+M1+M2 monetary supply sits at ~25 Trillion. Adding an additional 2 trillion dollars to that is almost 10%. Saying "this isn't a big amount of money" seems wrong. Is there a better estimate for M0+M1+M2 supply?
The value of all the securities based on debt/housing values dwarfs anything like this stimulus.
When foreclosures and evictions are finally carried through, a giant amount of wealth is going to vanish. All this money is DROPS compared to the deflationary storm striking over the next 2 years.
But why such absurd sums of stimulus are not going to be inflationary, even in the face of the massive security market casino, is because the average person has been robbed by inflationary pressures for decades, like frogs in boiling water. The average person has no idea how much wealth they've been fucked out of, how much cognitive bullshit they've been forced to eat to prop up elites fucking thai boys in the beaches and being banal decadent fucks.
Blake Wilson
Or in other words, we should be sharing qualities of life higher than we do now. Maybe even to the point where it would seem extravagant and preposterous in comparison to the dullness imposed as a wall against riff raff invading the penthouse parties.
Carter Powell
israel has every right to exist
Gabriel Thompson
Should've emphasized that the governments want to shovel money as much as they humanely can without the "giving away" the coming deflationary act. Expect a lot of media attention on fiscal responsibility and avoiding inflationary pressures while governments attempt to delay any actions which would cause a markdown in the values of debt and property ala defaults, evictions, and foreclosures.
They're trying to "flatten the curve" of the deflationary contagion. At least until after the election cycle. Maybe Dec this year or Jan next year we will start seeing the more gory scenes of this horror simulation.
Kayden James
>2 trillion >not a lot to cause inflation >total GDP for the US is 21 trillion >a tenth of the product for the WHOLE COUNTRY being printed and given away in 2 weeks when nobody is actually producing anything >not a lot
It's mass theft of assets via devaluing of them through debt and interest, then repurchasing the debt for "future generations", effectively owning those assets.
Fraud on the largest largest scale ever seen in human history and people.have no idea it's going on.
Gavin Johnson
Yup, we are in a deflationary event right now. Once the economy bounces back and people go back to spending from saving, the massive influx of USD will cause runaway inflation, but this time it will affect the entire world as most reserve currencies are USDs.
The USD will be the last fiat to collapse, but it too, will collapse.
Eli Richardson
>taxes drive demand for currency Uh, what?
Jonathan Cooper
Sales volume increase =/= price increase
Egg prices are still exactly the same, but the volume being sold has increased
Jaxon Miller
>tfw live on farm with Chickens >tfw price of eggs before corona was $0 >tfw price of eggs after corona is $0 Is this the cure to inflation?
Jason Bell
That's how fiat works. It forces "growth" through debt. And I use the term "growth" very loosely.
Anthony Davis
yeah why is no one talking about this? So much stuff/businesses/real estate etc. is going to go under and the gubmint and other richer people will just buy it all up. It's a massive wealth and asset transfer and no one seems to care
Brody Rogers
You're an idiot. I wish they went up 30 percent where I'm at. They went up almost 300 percent. Usually 1.19 and I just paid 3.59.
Nicholas Gutierrez
Get as much money as you can from the government and get yours!
Dominic Stewart
Most people are gullible and stupid. The Rothschilds themselves have even said it isn't about money. Money is a means to an end. That end is total control of the human population through a mixture of mostly fear and easy pleasures; a perfect marriage of Orwellian and Huxleyan dystopic paradigms.
It's quite brilliant, really. Horrifying and evil, but brilliant.
Luis Williams
>Fraud on the largest largest scale ever seen in human history >It's a massive wealth and asset transfer and no one seems to care Fully agree.
First off, it's over 6 trillion when all is added up. Secondly, there is more coming. Thirdly, yes, it will 100% lead to inflation, the big question is, how much worse will other countries fuck their currencies and how much will it offset the inflation in the US?
Grayson Long
>Market cap of all US companies is 30tn >Inject 2tn That's about 7% inflation.
Samuel Morales
I'm not the poster you wanted to respond to. That is I was agreeing that the prices are lower than ever. I think the stores are worried they won't sell all the stuff ordered for Easter (like hams, I bought a ham that was normally $45.00 (a big one) for $17.00. The case was overflowing.
Logan Scott
if you NEED to pay taxes, and the government REQUIRES a specific currency for you to pay them, then demand for that currency is created - whether real or artificial, I don't think it matters as long as people would rather pay taxes than leave/prison/etc.
Justin Campbell
>100x 2tn is 200tn >market cap of us is 30tn This would literally be 666% inflation. Did you do this on purpose, or is Satan making a joke, with you as his conduit?
Chase Carter
inflation only affects money so if you can find something else with effectively the same purchasing power, then you beat inflation
Blake Hernandez
The price of your chicken eggs didn't go up this week because of monetary inflation you mouth-breathing neanderthal, they went up because of supply chain tightening.
Julian Lopez
Then why is the Euro persistently weakening? EU members have crazy high taxes, but all that's spurred on is a consistent inflation relative to the USD (10 year decline from 1.5:1 to about 1.05:1)
Camden Rodriguez
US colonial government did the same thing. In the late 1700s they literally burned tax dollars once they were collected (like in a fire). Everytime they printed paper money they levied a tax to bring some of it back in.
Giant amount of wealth will vanish. People will try to save their money which means they wont spend it, halting the economy further. Then they will try to cut peoples taxes, or even return them. In that case suddenly there will be a lot more dollars in cirulation causing hyperinflation. I dont know if that fits the 2 year of deflation narrative you are implying on... It might take a year for all of this to happen. Accumulate PM and cypto if you want to survive. Pull stocks now before they plummet 95%
Tyler Morris
Pretty sure the Trump Bucks are going to be taken out of your 2020 tax return. The way the money is structured is the same as the tax code.
Adrian Garcia
I don't actually know but I'd guess that's due the demand for the currency is lower than the USD, taxes aren't the only thing that create demand - it's just a really important aspect of it
William Murphy
So your saying they are going to take the cash back that buffet and the like are hording?
Ayden Evans
Yeah, I thought we were looking at a deflationary period THEN hyperinflation further down the line?
So they accomplished 10 years of devolving the currency's purchasing power in 2 weeks. Pretty impressive.
Dylan Williams
Yeah i linked it in the post above. And he is right. I know a lot of people dont open yt links, so i just wrote the important stuff
Camden Cook
Where does the fed get the money to buy?
Nolan Perry
Based and Maloneypilled.
I'm literally just pumping any money I can spare into crypto and PMs. I don't care how high the premiums get for the latter. When supply truly dries up and both silver and gold triple in price, it will be worth it to have as much as possible.
Xavier White
Kek this has been known for a while. If you follow this guy your behind the curve
