The reason we don’t see hyperinflation is because of the incredible efficiency of modern companies and their model of cutting costs all along the supply chain. It creates a deflationary environment because they lose market share if they raise prices. And all that money printing created massive inflation...in stocks and bonds. Banks aren’t lending it out, they make more money pouring it into the markets.
The reason we don’t see hyperinflation is because of the incredible efficiency of modern companies and their model of cutting costs all along the supply chain. It creates a deflationary environment because they lose market share if they raise prices. And all that money printing created massive inflation...in stocks and bonds. Banks aren’t lending it out, they make more money pouring it into the markets.
All true.
Except;
“All that money printing created massive inflation”
....in stocks and bonds
Stocks yes, Bonds, not so much.
Any honest and objective view of the economic history of the Western world would see that we transition between a series of technological breakthroughs that are transformational.
From the Industrial revolution which was truly economically transformative, to the most recent breakthrough and its natural extensions.
The most recent, truly game changing technological breakthrough was the integrated circuit and that happened 50 plus years ago. Everything from the PC, the Web and smart phones have been an extension of the I.C.
The FED may be misguided, they may be overly optimistic, but they are not stupid.
I think that the FED was and is counting on the next “revolutionary technology” to emerge to save them and our nation. It’s all they know.
There are in fact an number of areas that “could” provide the next economic revolution. We are getting closer in alternative energy (nevermind climate change), Bio-tech and Nano-tech. We are close and the choice the FED is faced with is to either let the economy collapse into depression or attempt to delay depression and hope that one or more of these technologies becomes viable.
And BTW, if one were to take hold, our debt would be gone faster than you could elect a new president.
In the meantime the choice they are presented with is to either let our nation slide into a deep depression or do whatever they can to buy time.
Would would you do if you were in charge of the FED?