Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: bkopto

“I would prefer an honest market.”

The market has always been based on factors that the average person (I include myself sometimes!) just doesn’t understand.

But someone might help me with something that has bothered me for a long time. Back when I was in college (when they actually taught something) I was taught that when large amounts of money being pumped into an economy causes inflation. The perfect example was the Weimer Republic in pre-Hitler Germany. They tried to get out of debt by running the printing press overtime pumping out money. But in recent years there has been little inflation even though the Fed has been doing much the same thing. I know that someone will tell me that this is a dumb question, but could anyone help me here?


26 posted on 07/06/2020 4:14:39 PM PDT by gbscott
[ Post Reply | Private Reply | To 15 | View Replies ]


To: gbscott
But in recent years there has been little inflation even though the Fed has been doing much the same thing.

The problem with the inflation number is that the government calculates it, and its calculations are rigged in its favor (so it doesn't have to give COLAs to social security recipients).

For an honest accounting of inflation, for real world items that you and I buy, visit:

https://chapwoodindex.com

28 posted on 07/06/2020 4:20:23 PM PDT by bkopto
[ Post Reply | Private Reply | To 26 | View Replies ]

To: gbscott

But in recent years there has been little inflation


On what basis do you say that?

We have tremendous inflation. There are exceptions to inflation don’t focus on them.

Why is the stock market up? more money chasing few stocks. There is no discussion of those companies being profitable only perception.

if you want to understand the economic situation read The Vampire economy, easy read and downloadable here:

https://mises.org/library/vampire-economy


30 posted on 07/06/2020 4:24:00 PM PDT by PeterPrinciple (Thinking Caps are no longer being issued but there must be a warehouse full of them somewhere.)
[ Post Reply | Private Reply | To 26 | View Replies ]

To: gbscott

If money is not released into the “wild”/”the market”, inflation can be curtailed (Through quietly/strategically “hoarding”). Wiemar had a lot of variables but some (Emphasize some) of the variables could exude upon other countries (Even with viable central banks/bonds/commodities).


32 posted on 07/06/2020 4:29:15 PM PDT by rollo tomasi
[ Post Reply | Private Reply | To 26 | View Replies ]

To: gbscott

The answer to your question is that the world has a dollar shortage.

In recent years countries besides the United States have issued huge amounts of debt denominated in dollars.

That’s because international investors trust the U.S. dollar, and they don’t trust the currencies of a lot of other countries. The amount of that outstanding debt is around 60 trillion dollars.

These countries need dollars to service the interest on their debt. This has created a global shortage of dollars estimated to be about 13 Trillion as of March 2020.

So while the Fed has increased the money supply by a few trillion dollars it’s being absorbed by international demand. That’s why you aren’t seeing a ‘70s style inflation.


70 posted on 07/07/2020 9:48:58 PM PDT by Pelham ( Mary McCord, Sally Yates and Michael Atkinson all belong in prison.)
[ Post Reply | Private Reply | To 26 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson