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Modern Monetary Theory Is Wrong: Inflation Is Coming
NewsMax ^ | 3/19/21 | Michael Busler

Posted on 03/19/2021 2:27:23 PM PDT by fruser1

As long as banks can make loans, the Fed’s initial increase can finally increase the money supply many times over.

The large final increase in the money supply should be inflationary. That wasn’t the case 10 years ago. From 2010 to 2018, the Dodd-Frank bill placed severe restrictions on bank lending, which reduced the multiplying effect. That could be the reason there was no inflationary impact.

But parts of Dodd Frank were repealed in 2018, so now there should be a greater multiplying effect, likely contributing to inflation.

Rising energy prices, a rapid growth in the money supply, huge government budget deficits and a potential capital shortage all point to a future inflation problem.

Those who support MMT have reached conclusions that are simply not accurate. Continuing to print money and continuing to deficit-spend do have consequences. The first consequence is rapidly rising prices. I am afraid that is coming.

(Excerpt) Read more at newsmax.com ...


TOPICS: News/Current Events
KEYWORDS: inflation; mmt
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To: fruser1

Bttt


61 posted on 03/19/2021 5:51:09 PM PDT by thinden
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To: KevinB

It’s obvious the paper itself has no inherent value. You can’t walk around with tons of silver or gold. The cavemen had this argument already when they started using clamshells as coins. Get over it and go make money faster than it inflates. I’ve been living with inflation for over 50 years of work and “revinventment”, what I call retirement. It’s worked out fine, and those worthless dollars have paid for everything with no problem. I’ve converted them into houses, land, art, equipment, services, anything and everything I want.

The FED isn’t going away, might as well take what it gives, which is plenty. Inflation was around 14% when I started out. I didn’t even think about it, just went out and made my way. There wasn’t any other choice and there still isn’t. Now inflation is 2%, who cares. 2 or 20, it’s just the number to beat. The currency collapse fear-porn story has been around since before my first job. I’m lucky I’ve always ignored it.


62 posted on 03/19/2021 5:58:02 PM PDT by SaxxonWoods (The Republican Party is dead. Long live the MAGA Party.)
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To: Steely Tom

“Blame it on Trump”

Face it, he deserves some of the blame. He fell for the months-long coronascam economic destruction that will lead to massive inflation, free healthcare, UBI and government control.

He should’ve dropped Fauci and Brix and money for fake testing and the fake vax-a-thon at Easter 2020.


63 posted on 03/19/2021 6:16:41 PM PDT by ReaganGeneration2
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To: Mr Ramsbotham

Interesting you say that. Money is really just a claim against the goods and services that an economy produces. If the money is sent overseas where it can’t (easily) be used to claim against the economy that “generated it”, can it cause inflation in the economy that originated it?


64 posted on 03/19/2021 6:48:10 PM PDT by Hardastarboard (Don't wish your enemy ill; plan it.)
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To: Jim Robinson

>>It’s almost like they WANT to bankrupt the country.<<

Cloward/Piven.

A side note, flooding our country with illegals also puts a huge strain on our infrastructure. Biden and his merry band of leftist promise to ram through a huge infrastructure spending package.

Higher fuel prices, tax increases, enormous cost of open borders, ramping corporate outsourcing once again, the smell of war in the air...this will be an interesting four years.


65 posted on 03/19/2021 6:50:56 PM PDT by servantboy777
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To: Huskrrrr
Congress will finally push through a $15/hr minimum wage, IMHO.

Which means fewer minimum wage jobs overall, AND higher costs for a lot of construction jobs that aren't minimum wage, but are pegged to the minimum wage.
66 posted on 03/19/2021 7:06:42 PM PDT by Dr. Sivana (There is no salvation in politics)
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To: SaxxonWoods

You won’t be able to keep ignoring it if they have their way. You’ll need a vaccine passport to work, then they’ll transition to a mark of some kind, maybe a chip. If you’re ok with all that, well, then you have bigger problems.

It’s not a matter of if, it’s only a matter of when.


67 posted on 03/19/2021 7:14:24 PM PDT by Bulwyf
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To: Diana in Wisconsin

Don’t forget gold. 😉


68 posted on 03/19/2021 7:32:31 PM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped)
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To: SuperLuminal

“I see street walkers .... Oh wait... Never mind...”

Oddly those ladies are the absolute best measure of inflation. Their services are totally uncontrolled by government monetary policy. If their price is up, inflation is up. If their price crashes it is a depression. Their price also reflects local economics perfectly. Their services are much more valued in Las Vegas, Austin, the East Side of New York and exceptionally so in Mayfair in London in the most expensive and private clubs. Just like stocks, they have inherent value which changes with time.

I do not say this in humor but it is funny.


69 posted on 03/19/2021 8:21:15 PM PDT by cpdiii (Texan Coonass Cane Cutter Deckhand Roughneck Geologist Pilot Phamacist. CONSTITUTION TO DIE FOR. )
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To: Hardastarboard
If the money is sent overseas where it can’t (easily) be used to claim against the economy that “generated it”, can it cause inflation in the economy that originated it?

I would think so. But the effect (if my speculation has any validity) would be diluted.

70 posted on 03/19/2021 8:47:51 PM PDT by Mr Ramsbotham ("God is a spirit, and man His means of walking on the earth.")
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To: Alberta's Child
...So how DO we measure price inflation in a product like this?...

That, my friend, is the job of the boys and girls at the Bureau of Labor Statistics. The job is arcane and difficult, as you have just noted. BUT, consider carefully who signs their paychecks. They all know which side their bread is buttered on, and they know that low inflation is politically more acceptable than high.

Every single time there is a choice to be made, they know how the calculation will come out and they choose the low inflation assumption rather than the high inflation one.

If you want your blood pressure to raise beyond control, Google "Shadow Government Statistics" and take a look at a better estimate of real inflation.

71 posted on 03/19/2021 9:48:31 PM PDT by CurlyDave
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To: DannyTN
Thanks for all the food for thought.

You're pointing out that commodities mostly tend to rise together, along with real estate and (in normal worlds) interest rates.

WHEN that happens we're in an inflationary cycle. What may curtail it, as you allude to, is inactivity in the economy. In Carter's time however, economic inactivity and inflation coincided - i.e. stagflation.

I'm betting that's where this is going, but the economy is so global and volatile now it's hard for anyone to get a handle on.

72 posted on 03/19/2021 10:21:28 PM PDT by AAABEST (NY/DC/LA media/political/military industrial complex DELENDA EST)
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To: AAABEST

Yes and stagflation is caused by monetary policy as opposed to inflation that is caused by capacity restraints.

I’m still trying to make practical sense of it all. The amount of money on the sidelines in M1 and M2 plus the current stimulus is a lot of money that could flow into the market and drive prices higher.

But if market psychology turns negative it can make all of that money just cease to exist quickly.

What to do? What every I do, I will probably try to hedge some.


73 posted on 03/20/2021 12:36:21 AM PDT by DannyTN
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To: Steely Tom

Price of gasoline is up 70 cents since election. That will raise the price if everything and reduce people’s spending power


74 posted on 03/20/2021 2:16:23 AM PDT by Jimmy The Snake (He )
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To: fruser1

bmp


75 posted on 03/20/2021 2:38:41 AM PDT by gattaca ("Government's first duty is to protect the people, not run their lives." Ronald Reagan)
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To: Fai Mao

With your car example... which group has suffered the most car inflation as per the food example below...

https://www.weforum.org/agenda/2016/12/this-map-shows-how-much-each-country-spends-on-food/

from link:

Over the past 25 years, the poorest 20% of households in the US spent between 28.8% and 42.6% on food, compared with 6.5% to 9.2% spent by the wealthiest 20% of households.


76 posted on 03/20/2021 4:14:47 AM PDT by GOPJ (Rasmussen:75% of Americans support voter ID laws.(60% Democrat support - 89% Republican support.)
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To: Georgia Girl 2; Ellendra

Not sure if you saw the post, but Ellendra suggested buying simple gold wedding bands for ease of portability and easier bartering.

I thought that was a really smart idea. :)


77 posted on 03/20/2021 6:43:24 AM PDT by Diana in Wisconsin (I don't have 'Hobbies.' I'm developing a robust post-Apocalyptic skill set. )
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To: Diana in Wisconsin

A good idea.


78 posted on 03/20/2021 6:55:39 AM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped)
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To: DannyTN

It does get interesting. A significant fraction (I will not even guess on the percentages) of the stimulus checks will either go to pay back rent or credit card debts, which due to the wonders of fractional reserve banking, will reduce the money supply. Another noticeable chunk of those stimulus checks will not be spent for months spending time in checking accounts that earn little to no interest.


79 posted on 03/20/2021 7:45:22 AM PDT by Fraxinus (My opinion, worth what you paid.)
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To: Dr. Sivana

Invest in industrial robot makers...


80 posted on 03/20/2021 7:47:59 AM PDT by Andy from Chapel Hill
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