So money printing does NOT lead to inflation, like I said there is no such thing as Economics 101. It doesn't exist in the world we live in and never will. This is an actual fed member touting this garbage. Fed Chair Jerome Powell says money printing doesn’t lead to inflation https://www.kitco.com/news/2021-02-...money-printing-doesn-t-lead-to-inflation.html
Fed Chair Jerome Powell said money printing thing and that created trading opportunities & the market moved massively. THANK YOU POWELL !
With Obama running the presidency and Powell running the Fed, what chance does America have for any kind of quality future??
Obama left over 4 years ago, let it go. what is fascinating is the inflation does stay subdued for real necessary things like food. Did it just all into the market ?
I think it’s hidden in stuff like food goods etc. being only noticeable over a long period of time. Packaging becomes smaller, quality becomes cheaper etc.
Perhaps in the future, but I do not see it anywhere yet. After all between all programs was it not 10 trillion issued last year? It is just a staggering amount of money.
Time stood still for OP for 11 years. Still bitching about the Fed, claiming falsely that they are the direct mover of stock markets, and expecting ab imminent stock market crash to get PEs to 3-5 market wide. There seems to be no learning curve with this guy.
But he is kinda right, his point remove fed stimulus and bang all goes to hell. Meanwhile, as far as I understand he trades with the trend.
Technically, he is right, but what he should have said, assuming your quote is accurate, is, "money printing won't necessarily lead to inflation." He is not quite so articulate as Bernanke. In a fiat money world, all outside money, which is the money created by a government and spent into the economy, is "printed." (The money not spent into the economy, but created within the economy by fractional reserve banking and credit, which I call "inside money," is different in that it is automatically created when a loan is made, and automatically disappears when a loan is paid off. This inside , or credit money if you will, is the main determiner of "the money supply". Because inside money is demand limited, the fed, under normal circumstances, has only weak indirect control over it via interest rates). Many factors determine inflation, but ultimately it is dependent on the demand for goods and services vs. the amount of goods and services available and the amount of money available to make purchases. In fact, if we didn't print enough to keep up with expansion in an economy we could still be running small deficits an yet overtime not be expanding the amount of outside money enough to prevent deflation. Indeed, it is possible for deficits to be too small, as well as too large. That's why it isn't possible in an economy that is growing, to "pay off the 'debt'" by raising taxes, spending less and running a surplus.* If we ran repetitive surpluses, it would soon enough cripple our economy and produce damaging deflation. Small deficits (expansion of outside money) are normal and will be necessary so as long as an economy is expanding (growing). Large deficits may be necessary during recessions, even sectoral recessions as we are seeing now. Once the pandemic has abated, and as the economy goes back to normal, the fed will reduce its bond buying and will eventually shift back to bond selling to reduce excessive outside money in the economy by draining excess bank reserves. To prevent deflation, the deficit normally grows with the economy. (Deflation will occur if we starve the economy for the money it needs. Economist who specialize in money theory look with puzzlement upon ET folks that call for 'paying of the debt', 'going back to the gold standard', or 'running surpluses', etc. ) That said, it is a fine balancing act to supply just the right amount of outside money to the economy to furnish the fuel for the level of savings, investment and credit an economy needs at any particular time, depending on circumstances. The fed must avoid oversupply, or excessive inflation will result. A little inflation, however, is preferable to a little deflation in an economy that runs on inside debt. (Government debt doesn't really exist in the sense that our private sector debt exists. That, and the Constitution, is why the annual discussion over the 'debt ceiling' is both ridiculous and absurd.) Fiat money is effectively based on a productivity standard, and as long as the amount of money printed remains in rough balance, over time, with productivity we will be fine. We will get into trouble if we don't pay attention to this over the long haul. We do see signs of stepped up inflation right now, as a matter of fact.) I would have preferred that Yellen be left at the fed, as I don't think Powell's understanding runs quite as deep as Yellen's , but at least she will be at the Treasury where she will be close at hand as a consultant to the fed. _______________ *An exception would be a country running a large trade surplus. (Norway, before the crash in oil prices!)