/biz/ - Business & Finance

The FED is not just printing money and injecting it into the economy like BRRRR. For the most part, they are buying treasury notes which need to be paid back/interest needs to be paid on them. As they are paid off, the money comes back the FED and can be eliminated.

It's interesting. I reckon the main idea of the stimulus is to maintain a slow steady inflation, to keep pace with growth. All in the name of avoiding a deflationary spiral. Great article on this here (totally predicted the stimulus package, btw): https://seekingalpha.com/article/4332366-massive-deflationary-bust-without-fiscal-response-expect-1minus-2-trillion-fiscal-response

However; with such huge amounts of money being added to the system, won't that cause inflation regardless? Also, if there's no growth but there's still extra money being added - doesn't that *also* lead to inflation? This is directly going to hurt the average American imho.

PS: I'm not an economist, just a spectator from across the pond.

>>18301282
Can you explain how what you just described is *not* printing money? The fed are also going to start buying corporate bonds as part of the stimulus package, IIRC.

>>18301282
what happens when they can't be paid back?

Bumping with females holding currency, waiting for ANSWERS.

>>18301214
i bought eggs at like 30% premium a couple days ago already.
inflation is already here, theyre using hoarding as the short term reason but the prices wont drop.
u either have to invest in something with the money you have go into ddebt or eat the inflation losses

>>18301214
what you don't understand is that yes, massive stimulus will cause inflation, but 2 trillion isn't massive. it just sounds massive cuz muh big number. but it would actually take an amount 100x that to cause actual inflation that would start to impact our lives in a meaningful way.

That's a man

>>18301214
https://theintercept.com/2020/03/27/coronavirus-stimulus-package-spending/

basically if taxes are not increased then inflation

>>18301375
>>18301284
>>18301214
those are men, OP

>>18301394
show me evidence that eggs in your area went up 30%, because i don't believe you

>>18301366
borrow more to pay of the borrowing

>>18301809
This man gets it.
Government can give out as much money as it wants to solve liquidity problems.
But then it has to such it back up again and burn it, just like in crypto protocols.
The other thing influencing inflation or deflation is trust in the system, just like crypto.
The US Confederate army printed their own dollar, and it was accepted 1:1 with the union, until it started to become clear they weren't going to win.
The US can now print as much money as they want if it means they can win the war, but when it becomes widely clear they aren't going to win, the USD will sink like a rock.

>>18301214
If the $6T in assets purchased by the Fed hasn't affected the economy, nothing will.

>>18301816
there are sales galore at my grocery store, went yesterday (except frozen veggies were all gone)

>>18301816
Go to a fucking grocery store retard

>>18301214
It would need to be $30tn to be guaranteed massive inflation

>>18301809
did you even read it? the chick was talking about how a 1.4t student debt cancellation just from printed money wouldn't harm the economy or increase inflation, but she doesn't really go into detail on the actual stimulus and whether or not that would cause inflation
this is what happens when you have girls in high level jobs, seriously bluepilled take on the whole thing
I bet she was the head of institutional lending at some point

>>18302213
unless the demand for the currency increases by that much too

>>18301214
The demand for USD from the rest of the world exceeds even the currently planned print runs - and this will reduce inflation expectations: the world is betting that the United States will be the best placed nation for the After Plague.

However, once other countries get back on their feet, those printed dollars they bought will come back to the States like a tsunami. THAT’S when the inflation will hit, and very, very hard

>>18303064
>I bet she was the head of institutional lending at some point
subtle kek

>>18303261
based picture

>>18301797
What? According to https://tradingeconomics.com/united-states/money-supply-m1 -- the total M0+M1+M2 monetary supply sits at ~25 Trillion. Adding an additional 2 trillion dollars to that is almost 10%. Saying "this isn't a big amount of money" seems wrong. Is there a better estimate for M0+M1+M2 supply?

>>18301214

IDIOTS

The value of all the securities based on debt/housing values dwarfs anything like this stimulus.

When foreclosures and evictions are finally carried through, a giant amount of wealth is going to vanish. All this money is DROPS compared to the deflationary storm striking over the next 2 years.

But why such absurd sums of stimulus are not going to be inflationary, even in the face of the massive security market casino, is because the average person has been robbed by inflationary pressures for decades, like frogs in boiling water. The average person has no idea how much wealth they've been fucked out of, how much cognitive bullshit they've been forced to eat to prop up elites fucking thai boys in the beaches and being banal decadent fucks.

>>18304779

Or in other words, we should be sharing qualities of life higher than we do now. Maybe even to the point where it would seem extravagant and preposterous in comparison to the dullness imposed as a wall against riff raff invading the penthouse parties.

>>18303261
israel has every right to exist

>>18304779
>>18304835

Should've emphasized that the governments want to shovel money as much as they humanely can without the "giving away" the coming deflationary act. Expect a lot of media attention on fiscal responsibility and avoiding inflationary pressures while governments attempt to delay any actions which would cause a markdown in the values of debt and property ala defaults, evictions, and foreclosures.

They're trying to "flatten the curve" of the deflationary contagion. At least until after the election cycle. Maybe Dec this year or Jan next year we will start seeing the more gory scenes of this horror simulation.

>>18301797
>2 trillion
>not a lot to cause inflation
>total GDP for the US is 21 trillion
>a tenth of the product for the WHOLE COUNTRY being printed and given away in 2 weeks when nobody is actually producing anything
>not a lot

>>18301883
It's mass theft of assets via devaluing of them through debt and interest, then repurchasing the debt for "future generations", effectively owning those assets.

Fraud on the largest largest scale ever seen in human history and people.have no idea it's going on.

>>18303106
Yup, we are in a deflationary event right now. Once the economy bounces back and people go back to spending from saving, the massive influx of USD will cause runaway inflation, but this time it will affect the entire world as most reserve currencies are USDs.

The USD will be the last fiat to collapse, but it too, will collapse.

>>18301214
>taxes drive demand for currency
Uh, what?

>>18301905
Sales volume increase =/= price increase

Egg prices are still exactly the same, but the volume being sold has increased

>>18301394
>>18301816
>tfw live on farm with Chickens
>tfw price of eggs before corona was $0
>tfw price of eggs after corona is $0
Is this the cure to inflation?

>>18305119
That's how fiat works. It forces "growth" through debt. And I use the term "growth" very loosely.

>>18305059
yeah why is no one talking about this? So much stuff/businesses/real estate etc. is going to go under and the gubmint and other richer people will just buy it all up. It's a massive wealth and asset transfer and no one seems to care

>>18301816

You're an idiot. I wish they went up 30 percent where I'm at. They went up almost 300 percent. Usually 1.19 and I just paid 3.59.

>>18305318
Get as much money as you can from the government and get yours!

>>18305318
Most people are gullible and stupid. The Rothschilds themselves have even said it isn't about money. Money is a means to an end. That end is total control of the human population through a mixture of mostly fear and easy pleasures; a perfect marriage of Orwellian and Huxleyan dystopic paradigms.

It's quite brilliant, really. Horrifying and evil, but brilliant.

>>18305059
>Fraud on the largest largest scale ever seen in human history
>>18305318
>It's a massive wealth and asset transfer and no one seems to care
Fully agree.

The PDCF has risen from the dead.

>>18301214
First off, it's over 6 trillion when all is added up. Secondly, there is more coming. Thirdly, yes, it will 100% lead to inflation, the big question is, how much worse will other countries fuck their currencies and how much will it offset the inflation in the US?

>>18301214
>Market cap of all US companies is 30tn
>Inject 2tn
That's about 7% inflation.

>>18305129
I'm not the poster you wanted to respond to.
That is >>18301394
I was agreeing that the prices are lower than ever. I think the stores are worried they won't sell all the stuff ordered for Easter (like hams, I bought a ham that was normally $45.00 (a big one) for $17.00. The case was overflowing.

>>18305119
if you NEED to pay taxes, and the government REQUIRES a specific currency for you to pay them, then demand for that currency is created - whether real or artificial, I don't think it matters as long as people would rather pay taxes than leave/prison/etc.

>>18301797
>100x 2tn is 200tn
>market cap of us is 30tn
This would literally be 666% inflation.
Did you do this on purpose, or is Satan making a joke, with you as his conduit?

>>18305194
inflation only affects money so if you can find something else with effectively the same purchasing power, then you beat inflation

>>18301394
The price of your chicken eggs didn't go up this week because of monetary inflation you mouth-breathing neanderthal, they went up because of supply chain tightening.

>>18306215
Then why is the Euro persistently weakening? EU members have crazy high taxes, but all that's spurred on is a consistent inflation relative to the USD (10 year decline from 1.5:1 to about 1.05:1)

>>18301862
US colonial government did the same thing. In the late 1700s they literally burned tax dollars once they were collected (like in a fire). Everytime they printed paper money they levied a tax to bring some of it back in.

>>18301214
>Thoughts welcome.

https://www.youtube.com/watch?v=E7r7nTVmdLc

>>18304779
>>18304835
Giant amount of wealth will vanish. People will try to save their money which means they wont spend it, halting the economy further. Then they will try to cut peoples taxes, or even return them. In that case suddenly there will be a lot more dollars in cirulation causing hyperinflation. I dont know if that fits the 2 year of deflation narrative you are implying on... It might take a year for all of this to happen. Accumulate PM and cypto if you want to survive. Pull stocks now before they plummet 95%

>>18301214
Pretty sure the Trump Bucks are going to be taken out of your 2020 tax return.
The way the money is structured is the same as the tax code.

>>18306332
I don't actually know but I'd guess that's due the demand for the currency is lower than the USD, taxes aren't the only thing that create demand - it's just a really important aspect of it

>>18306743
So your saying they are going to take the cash back that buffet and the like are hording?

>>18306840
Yeah, I thought we were looking at a deflationary period THEN hyperinflation further down the line?

>>18306840
>https://youtu.be/E7r7nTVmdLc

Someone watched mike Maloney

>>18306173
So they accomplished 10 years of devolving the currency's purchasing power in 2 weeks. Pretty impressive.

>>18307031
Yeah i linked it in the post above. And he is right. I know a lot of people dont open yt links, so i just wrote the important stuff

>>18301282

Where does the fed get the money to buy?

>>18307031
>>18307090
>>18306840
Based and Maloneypilled.

I'm literally just pumping any money I can spare into crypto and PMs. I don't care how high the premiums get for the latter. When supply truly dries up and both silver and gold triple in price, it will be worth it to have as much as possible.

>>18307031
>>18307134
Kek this has been known for a while. If you follow this guy your behind the curve

https://www.federalreserve.gov/faqs/currency_12773.htm

So, this is how much money is in circulation. A cool 1.75 trillion. The government was talking about a 2 trillion injection. Obviously, most of it won't be in hard cash, but it still will be a decent amount in cash, to prevent banks from being unable to provide money in withdraws for one thing.
Still, by the looks of it, at least 700 billion will enter circulation. That itself means a flat 40% inflation. Obviously, that's not how inflation works, but let me tell you right now: short of a miracle, the inflation rate for the next year should be over 10%. Americans don't even know how to save money, a majority doesn't even have over 1000 dollars in savings.
Maybe it will be fine. Across the globe the dollar has been extremely valued, so maybe there's enough demand that inflation won't propagate domestically. But, unless you start consuming insane amounts of imports, I don't see how you'll avoid an inflation.

>>18307368
> "notes"

Notes are 5% of the money in circulation so 1.75/0.05 = 35 trillion in circulation

>>18307368
>Obviously, most of it won't be in hard cash, but it still will be a decent amount in cash

QE is 100% financial instruments. The people's bailout is a tax rebate from next year. Small business loans are just that: loans. And all of these actions have spurred even greater confidence in foreign markets of American guarantees, which means even more capital flight into dollar-denominated assets. Which means not only no inflation, but likely slight (but increasing) DEflation. How come nobody ever looks at the broader picture?

>>18307490
Because they want it to be true in order to justify their investments. But of course it isn't and they stay in the poor hole.

>>18307529

I suspect that one's just ignorant, since he thinks that the US is "consuming imports" whenever there's CAPITAL flight.

>>18301214
I would normally say yes but the USD is already highly valued and petrodollar status isn't going anywhere anytime soon.

INFL AW TION IS WHEN PEOPLE HAVE LLTS OF MOENY

>>18307490
>>18307579
Circulating money is circulating money. Does it matter that it's a tax rebate? If you give banks the financial instruments that allow them to put more money in circulation, does it matter that it's a contract I can't use in my supermarket? I didn't even imply in capital flight, because it anything, you have a ton of FOREX coming back home and others just diversifying into a more stable currency. Nothing currently indicates that Americans are investing outside the US again. And the only way that you'll stop an inflation with the currently influx of currency into your country is by removing that money from circulation, which mostly will only happen by importing goods.
I can understand that, currently, there's a large deflationary wave. But there's nothing indicating that a large inflationary wave isn't going to happen in 2~3 years time.

>>18307529
Not, not really. I've been trying to wrap my head around the current dollar deflation scenario since the start of the last month and the 0% treasury bond rate, but it hasn't been totally clear to me.

>>18307732
>Does it matter that it's a tax rebate?

Pulling consumption forward from the future to use now absolutely matters.

>And the only way that you'll stop an inflation with the currently influx of currency into your country is by removing that money from circulation, which mostly will only happen by importing goods.

Capital flight from one currency to the other causes deflation because of exchange rates: More yen/yuan/euros chasing fewer dollars. In this case, the Fed is actively halting a deflationary spiral. And, two trillion dollars has already run its course. You can either expect more, or you can expect capital controls in some form, likely a tax on foreign capital.

>>18307785
Ok, what I'm getting at is that, because there's a huge demand in the world for dollars, their exchange rate has skyrocket. That means that the US generally has cheaper products in the external markets, which are desperate for a more stable currency. Which itself causes deflation. That's fine. I got that.

What I don't get is how this isn't going to cause a massive inflation when it's all over and people everywhere else in the world get rid of their dollar reserves. Because that's what's going to happen once the exchange rate starts being favorable towards local currency, which inevitably happens.

>>18307874

Depends on the asset class. Bonds have set maturation dates, stocks are transferable assets, and any real estate bubble will be countermanded by the ongoing demise of the Baby Boomers. That said, I don't think you understand how long of a process that is going to be. We're likely to see capital flight to the US for decades to come, just through demographic pressures.

Capital flight from Europe in particular weakens their banking structure, and banking is over 80% of all capital growth in the Eurozone; when European banks start to go belly up, capital flight will increase to the US regardless of legality. It will be one of the great capital transferals in history.

>>18307874
Because it won't go into consumer goods, it will go into US stonks and other 30 different currencies, consumer goods won't be touched by it.

>>18307949
>>18307957
Well, that info pretty much turns me into a doomsday preparation guy. I'm starting to think a safe retirement for all is an actual illusion. Because if the economics are getting this much distance from goods, from actual things, and going further and further into imaginary value.. At the end of the day, people will have rely further and further into their own salaries instead of how they decided to use the money they have accumulated over the years. Risk in stocks or bonds is a joke when you never truly catch up in value.

It's late, I need to sleep and start making more sense of this in the morning. Thank you for your patience, I didn't realize how slow of a movement it would be or where the money would go.

>>18308107

The value isn't imaginary, wtf are you smoking? Stocks and Bonds are a claim to earnings. Real estate is a physical building. Consumer goods aren't the only driver of demand and value.

>>18307165
Imagine thinking you are being the curve, maybe later than most who have taken the pill but the curve is literally normies who are still arguing about wearing face masks or not. Anyway buy PNK if you want to survive the justice reckoning, heads will literally roll.

>>18304877
What are the actions which would cause a markdown in the values of debt and property and why are they necessary?

>>18305007
thank you, looks like it's not just me (>>18304202)

>>18304779
it'll still be inflation in the short-term, before the penny drops.

>>18301883
any more info on this graph?

>>18305119
I was recently introduced to the idea, but it makes sense: check out "Modern Monetary Theory". It's part of post-Keynesian Economic theory

>>18306776
I've watched all of Maloney's stuff; that's what got me onto the topic. I've also checked out some of Harry Dent. Atithmetic, Population and Energy by Albert Bartlett is a really good one, too. Always looking for more reading/watching material.

I'm just here for the women-horny-for-money pictures

>>18307490
Can you explain a bit more about how this will cause deflation?

>>18309929
stealing this one

I believe those two are men, however

>>18309953
It's all mind games. The US government appears to be on point, and was already the economy money was fleeing to. The evidence of the US taking steps to ensure stability in its economy will spur on foreign investors to park their money Stateside.

>>18301366
nothing, Central Banks dont owe money to any one, it just affects the balance sheet

ITT Redditors, /pol/ and /r9k/ fail to grasp the difference between helicopter money and printing money

>>18305368
well this is most probably because of Covid, here in europe people are buying a lot of eggs, cuz now they eat more often at home, they are bored, and make more cakes with the kids. Most supermarkets run out of eggs, pushing prices

MMT is garbage and adds nothing to regression theorim. Money getting value from tax is just debit money described differently. It literally adds nothing to existing theory.

>>18310033
what about this one, is she a male too?

>>18309109
higher demand for money is essentially the deflationary factor that would cause that

>>18301214
There is no stimulus , the money is simply keeping the lights on

>>18304852
Lol So funny if you aren't serious.
Be careful 2%er

>>18301214
i like how one of the premises is that people need to pay taxes

>>18305090
Ugh. Brainlets.
Is your source your feelings?

>>18306215
What are currency pairings. I'll take brainlet questions that waste my time for 300$, trebek

>>18307014
Oooooo but everyone thinks that, soooooooo.
Will it still happen? Or will they fuck with the status quo they be pushin.

>>18307490
What about those 10k business loans that don't have to be paid back? Sounds alot like free money flooding the lowest levels.

>>18301282

Yes... they are _lending_ money to the government you fucking idiot. Do you think the government just sits on that money and does nothing? No of course not.

So the government spending will cause inflation!

>>18310954
I might add, the government spending in question here is giving people $1,200 USD in straight cash.

I would be very interested to know how one would avoid inflation there!

>>18310979
we won't get inflation until there is a sentiment change. It will happen suddenly

>>18310121
feel free to enlighten us, oh incredibly wise one.

>>18310620
Got any suggestions for reading material to learn more about the current theory?

>>18310875
Not a premise I agree with fren, but largely a given in our current age

>>18301214
Watch hidden secrets of money on YouTube

Money as debt is destroyed when loans are paid back or defaulted on. We are going to see a tsunami of corporate bond defaults over the next few months. This will lead to deflation. Also velocity of money is slowing. This leads to deflation also

>>18301805
Would you discoed trannies FUCK OFF

>>18301214
hey op, do you remember the crazy hyperinflation when money supply quadrupled in 2009?

Protip, no it wont cause crazy inflation, do you think people will have many more times the amount of dollars in their pockets and start buying several times the basic goods they were buying before the crisis, deiving up the prices?
No they wont.

Hopefully crypto will still boom tho, cause people will be scared of inflation, even if it wont happen

>>18312331
btw inflation is just a boogeyman created by the 1 percenters to use as an excuse to protect their interests..


NOOOOOOO YOU CANT JUST HAVE LOW UNEMPLOYMENT AND PAY WORKERS MORE!!!! IF THEY HAVE MORE MONEY THEY WILL START BUYING EVERYTHING AND PRICES WILL SHOOT UP! NOOOOOO

>>18311854
I did; but clearly there's some stuff I didn't appreciate. Got any other recommendations?

>>18312331
Nice graph! What explanations can you offer as to why inflation *didn't* happen in 2008? Rather than just saying "it didn't happen" -- we can all see that -- what are the reasons and do they apply this time as well?

>>18312496
i just explained it in the post below, those are the questions you should ask yourself,
where is the newly printed money going?
will demand for basic goods outstrip supply as a consequence to this money printing?
The answer is no.

One good example, that is the M1 chart, now look at M2, you see it dodnt jump like crazy like M1, but just kept a steady increase (id guess at roughly the inflation rate)?

What does this mean basically, in modern economies something like 97% of the money supply in circulation is not created by the central bank, but by provate banks, through loans (banks create money out of thin air when they make a loan).

Now of the government (fed) didnt do anything, what would happen during a crisis? Bank stop loaning cause businesses are failing everywhere, so the money supply CONTRACTS.
Thats where the government comes in, saying fine ill print enough money to cunteract this "pro-cyclic" contraction, then putting the money more or less directly in the economy (eg. giving a blanket government guarantee on sba loans so that even if they are not paid back the government will pay the loan back, so banks keep loaning).

When you some M1 created by government to the money created by banks through loans, you get M2(+), as you can see expansion of government created money just counteracted the contraction of bank created money, all in all the balance was kept.

On a more practical level, if half the population becomes unemployed, and government prints money to send them the equivalent of their old salary, inflation still wont happen (if supply stays the same), cause people will have the same amount of money they had before, and spend it on the same things.

>>18307119
They just print it lol, it's one of the biggest scams in history. Federal reserve isn't federal.

This is the reason why decentralization is just the solution to all financial Chaos, Borderless transactions and DEFI are steps towards transparency, innovations like Finnexus project are pushing for more transparent finances

>>18312749
so why go to work and be productive if the gov can support everyone on gibs

>>18307014
Depends on how long the lock down lasts. Also depends on companies, that are canceling expansion plans right now, will continue to hold off revisiting those plans later. Practically every company out there is watching their sales pipeline go to zero into next year. They are hoping that their current customers continue to pay their contract payments as is.

Plus, forget raises or bonuses. With lack luster sales, businesses will expect employees to tighten the belt even more and cut any "deadwood".

Even if we all go back to work within the week, businesses and consumers will be tentative in spending.

>>18312749
if half the population is unemployed, doesn't that mean there is half as much stuff being produced and cause the prices to increase?

>>18310979
Because, by the time those that need the $1,200 get it, they will actually need $4-5k. It would be one thing if the majority in the country were better off financially to begin with, but with half the population with zero savings and living paycheck to paycheck the deflationary spiral the Fed is trying to stave off is a revolutionary event.