Wake up and smell the coffee.
Since 1984, deficit spending in US is the norm.
Yet inflation has never exceeded 6%. Last few years it is 2 to 3%.
Have you used your God given brain to figure out why inflation has been tame in spite of huge printing of dollars?
ding ding ding
think think think
how come how come how come?
Ok y’all product of unionized public education, let me enlighten you.
Inflation happens when surplus dollars are chasing fewer goods and services.
Yes, we have surplus dollars galore. But we have no shortage of goods and services! China alone has 10 times the manufacturing capacity compared to 1980’s. India has a very large educated work force capable of providing services.
So have all the goods and services available to absorb the excess dollars. Result? Benign inflation. It is simple Econ 101. It is just that some Americans have no clue as to how much manufacturing capability has increased world wide.
But there is one monster waiting behind the curtain. And that is foreign trade deficit. We are importing much more than we are exporting. A lot of that deficit is due to oil imports. If our leaders do not push us towards extracting internal energy sources, dollar has only one way to go...down. And that will cause inflation in US dollar based goods and services. But strong currency countries will not experience inflation in the next decade or two.
As for the stock market near term, expectations of republican gains will keep a bullish bias until election. Market reacts to expectations. So if my hypothesis is correct, it is not wise to stay out of stocks now. If democrats retain house and senate, market will plunge badly.
Well there’s also the more than 50% tax rate increase on investment income coming next year. That will push people to take whatever profits they can this year. So I have to believe there are major forces trying to raise stock prices so stocks can be dumped before the end of the year with maximum return.
But...
I could be wrong...