Right - that ‘Quantitative Easing’ scheme? That’s literally injecting new money into the economy that wasn’t created by growth. How we don’t have hyper inflation right now is beyond my (non-economics education) capabilities to fathom.
All the money is sitting at the Federal Reserve….banks are not lending…just collecting a very low interest rate..inflation under Obama has skyrocketed in energy and food…
“How we don’t have hyper inflation right now is beyond my (non-economics education) capabilities to fathom.”
I suspect its due to the fact that the bulk of the new money is in banks and not in the hands of consumers. So it’s manipulating stuff that doesn’t yet affect us. Also, there’s a general insecurity that is preventing people from spending. Inflation is too much money chasing too few goods. Hyper-inflation is fleeing money for hard assets. If a “recovery” does start, the floodgates will open.
The US dollar is still a refuge for people in other countries. Not everyone with some wealth buys gold.
The US economy is still seen as safer than the dictates of the Chinese or Russian governments or the EU. Third World governments’ economy dictates don’t even need to be mentioned.
” How we don’t have hyper inflation right now is beyond my (non-economics education) capabilities to fathom.”
They are saying that it’s excess capacity, but that capacity is gradually drying up as plants downsize to make better profits.
Sooner or later the excess money will spill into the pipeline and create that inflation.
Right now it’s piling up at the banks so that they can meet Dodd Frank rules. They will have to unload the excess if the fed does not pull it back...eventually.
But you are right, it’s the craziest stuff I have ever seen or contemplated. And it’s just not happening yet. It’s a bubble or maybe a few of them waiting for a catalyst to pop them.