/biz/ - Business & Finance

>actual economics quesiton on /biz/
lol

line go up

all that money goes to the ultra rich and they hoard it

Buy ELONX

>>28198012
They are just printing USD to buy BTC

>>28198012

Inflstion is coming.

The talk about the great reset is absolutely that.

The fed has dropped its defination of inflation. Gibs are going out at a record pace. They are preparing you..because it will be here before this summer

>>28198012
Brainlet here. Most of that money when to very large institutions and propping up the stock market. People received table scraps so the actual amount of money competing for goods didn't increase that much which in turn didn't effect inflation.

Or it just takes time. Big ships turn slowly might only be felt in a year or two.

>>28198556
>fed fud

Don't care never selling.

>>28198012
Now you understand young man. We live in the matrix

Yeah I also dont understand how this has not hit everyday goods hard.
My guess is that most of the printed money is flowing directly into assets like real-estate and stonks.
Prices for everyday good isnt skyrocketing because supply and demand is low from covid. People cant work as much so no production and not much spendings.
So I dont know whether this wealth is going to be locked up in those assets or get pulled out after a certain point and fuck everyone.

The rich got richer.
The poor will be absolutely fucked in 2 years.

Its because the new money they created was used to purchase assets off the market...thus reducing supply and increasing prices.

Every post so far has been correct. Wtf biz I thought we were retarded?

>>28199280
What is considered rich? 30 Mil USD? I have 8k Link, 5k xrp, 0.5 BTC and 3 ETH and 500 algo.

>>28198012
Inflation is a meme. It's only bad if a country don't have productivity.

>>28198744

What will that look like to the average Joe? How will my world change before the Summer as you see it?

>>28199462
You are not rich.

>>28199137
Because smart Jew bankers realized that money flowing through the economy isn't as good as money used to pump assets like stocks/bonds/real estate.

So they dump it into assets, hence the constant all time highs in a economy that retracted 30% at one point.

This is how the government steals from the poor and lines the pockets of the rich. This process of pumping assets into a bubble is responsible for all wealth inequality in America because who owns assets and who doesnt?...except Nigs. Theyre poor because theyre low IQ.

>>28199462
Rich? 10 mill plus...

basically when you get to a point that inlfation alone tears you a new asshole so you dump all your money into finite, unprintable assets. Even a mill in cash takes a -$15k hit every year in buying power.

Thats why they call Inflation "taxation without legislation".

i basically have zero fiat..everything I have is either in crypto (85%) or precious metals(5%). the rest is basically the shit that I own..cars motorcycles tools etc. i usually only have a couple hundred dollars in physical cash at any given time for expenses. Am i going to survive whatever is about to happen?

>>28199280
The poor are absolute fucked today, what do you mean two years?

>>28199476
Youre a fucking retard. Inflation is the sole reason we have wealth inequality. Go kys with your meme intro to econ facts.

>>28198012
The inflation is not a consequence of monetary policies. As Mario Draghi stated repeatedly during his ECB presidency. Inflation depends on wages.

If wages stay low, you can print as much as you want without causing inflation. It is intuitive.

>Wages stay low because of unemployment but this is only tangential to your question

>>28199476
Western 'productivity' is measured in immigration. :^)

Economists took the chance to redefine inflation as meaningless consumer plastic garbage not assets like equities/land or necessities like real estate health care or education. A classic pilpul shell game - look at the new iphone, not that you’ll always be a renter! Thus we can ignore the housing market going +20% in a year as “not inflationary”.

The level of the answers here a part mine is absolutely abysmal . Delicate topic that causes large butthurt to USA goys

>>28199976
The original purpose of a 2% inflation target a year is to prevent scrooge mcduck/the OG robber barons from just sitting on swimming pools of cash and to have to invest it into productive assets.

Of course, we're far removed from that now, and the market no longer exists to raise money and allocate capital to worthwhile endeavors, but instead just exists to go up forever and make people money.

>>28199622
Obviously dumbass. Asking what is considered rich then posting my portfolio after the Anon said the poor will get fucked over in two years implies "will I be okay in two years with these holdings" god you are dumb.

>>28199842
Cool never heard of that before.

>>28200246
>housing market
That depends solely on the interest rate. Yes, the central bank controls that but it is unfortunately also correlated to other investments

>>28198012
It goes straight to rich people who buy assets with it.

A billionaire who gets another million dollar loan doesn’t suddenly buy more groceries.

>>28200061
What? That doesn't even make sense. This is the kind of retard economist shit that makes me lose my mind.

Paul Krugman, a nobel prize winning economist, once said that the USA could pay off all its debt by printing $1 trillion dollar bills...except you can't do that because the very basis of fiat is debt. Fiat is literally an IOU...so you would put yourself back in debt to pay off debt.

These guys are retards who think the Central Banking system isn't the greatest scam of all time. In 1000k years, or childrens children will laugh at the central banking system and look at it the way we all look at Communism. A complete fucking 50 year joke.

>>28200477
>the very basis of fiat is debt.
No, you are wrong and seethe. The debt owed by the government to the central bank is just a void number. The interests are paid by the treasury to the treasury. The key there is a separation of power, not basing the whole economy on debt

>>28198012
is he okay??

>>28200329
Why can't they sit in swimming pools of cash? Who gives a fuck? Reduced supply would mean prices would adjust accordingly.

No, inflation is taxation. Imagine you live on another planet made of gold and you find out Earth loves gold. When you show up with your spaceship full of gold, the prices havn't adjust yet becuase your gold hasnt hit circulation, thus, you get an initial discount. The government and central banks do this every year, you get to purchase initially at a discount, all the while printing IOUs that can literally never be paid back. Its a ponzi scheme.

Crypto will be the end of all of this btw, wait until there is a big anti-finance movement to crypto like the GME shit.

>>28200703
wut. A bond is an IOU.

so your saying im wrong by saying im right? Its a convoluted money printer.

>>28200329
>The original purpose of a 2% inflation target a year is to prevent scrooge mcduck/the OG robber barons from just sitting on swimming pools of cash and to have to invest it into productive assets.
It serves the most to reduce the burden on debtors, since inflation repay debts faster than growth. It’s the doctrine of the church to give relief to debtors, as stated in the pater nostrum.

>>28201180
You miss the whole political side of the matter and insist on the numbers without understanding their meaning

>>28199137
Look up the mechanics of QE and you'll see that it's just an asset swap. A private commercial bank trades a treasury bond/note/bill for a "reserve balance". Banks can and do convert reserve balances into cash to invest, but they need to keep the majority on hand in order to meet deposit demand liabilities (part of the M2) in case everyone wants their cash.

So it's not really free, printed money.

>>28200703
The interest on the bonds held by the Fed is paid for by the treasury (taxpayercucks) and the Fed has to use $30-40 BILLION of that to pay interest on reserve balances held by private commercial banks. So every year the treasury gives the Fed 80 billion and only gets 50 back.

the economy isnt real

>>28200061
>inflation is not a consequence of monetary policies

>>28201703
>$30-40 BILLION of that to pay interest on reserve balances held by private commercial banks.
Mario Draghi put that interest rate in the negative here in EU. Meaning that banks have to pay in order to keep their money on the ECB account. Kek

>>28201881
Nazis were not a consequence of inflation

>>28202091
Interesting. Thats why banks were charging me a quarterly "Saldo" fee just to keep my money on deposit with them. I was thinking this must be just because europeans are poor, kek

So I assume banks keep the bare minimum and store the rest in physical cash vaults?

>>28198012
total money supply doesnt matter as much as the velocity of money. Velocity being how often the dollars switch hands. Currently the velocity of USD is super fucking low, like historically low. The fed fucked up the recovery by buying so many corporate bonds. The money went to corporations, billionaires, and the stock market. It didnt actually go into the economy to buy stuff. All those big companies are too scared to spend right now, theyre just holding dollars and waiting. The fed shouldve (and they fucking kept asking to do this) gotten more stimulus checks out to wagies. Those people spend shit as soon as they get it, thats what the economy needs right now. It needs money to move around, people need to fucking buy shit.

https://fred.stlouisfed.org/series/M2V

>>28198012
The fed can only print bank reserves, that's what it does. Then it's up to banks to actually give out loans using those reserves and move money into real economy. Since real economy is dead, banks can't create new loans and new money isn't actually created. BUT there's still a huge POTENTIAL for it to be created.
Long story short can't have inflation when velocity goes down so much. But when it goes back up oh boy get ready, because the money is already queued up at the banks

The velocity of money is being kept down by lockdowns, if corona didn't exist we would be seeing enormous consumer price increases

>>28200061
based mmt take

>>28202775
>So I assume banks keep the bare minimum and store the rest in physical cash vaults?
I don’t know what the banks are doing right now. Would love to get insights. I fail to understand how their job can be profitable in current conditions

>>28203094
Il repeating only what my university professors told me

>>28199462
Convert Xrp to Algorand. Thank me later

>>28198012
>Someone please explain this witchcraft to me
they use a lot of jew magic to fudge inflation numbers, for example:
https://www.economicshelp.org/blog/603/inflation/hedonics-and-inflation/

for (made up) example, let's say the new Ford F150 is 10% more expensive
some random fag decides it's 12% better, therefore they calculate it as negative inflation even though the price went up 10% in a year

they also pick a really weird basket of goods and manipulate the price on half of it

>>28198012
Monetary policy have like 12 to 18 months impact delay. Meanwhile they could increase the demand of usd to mitigate the impact by hmmm idk, starting a war!

>>28202197
???????
please elaborate? arguably the rise of the NSDAP came from the economic destabilization in the Weimar era.

>>28198238
This.

It's like asking a real programming question on /g/ or for real workout advice on /fit/

>>28202828
>>28202976
>>28203041
>velocity is down
But you guys know that velocity isn't directly measurable. Its just a calculated ratio
V= GDP / Money Supply
So what you're saying is, we'll get inflation when
>GDP goes up bigly
and / or
>Money supply goes down

How is either of that going to happen suddenly with high unemployment, and forbearance & moratoriums ending?

>>28203345
They are trying to isolate the inflation number to measure ONLY the effects from QE. Inflation is caused by a lot more than monetary policy. Tariffs, supply chain fuck ups, price of oil, jews, all of these cause inflation but none of them are related to Fed policy.

>>28204253
personally i dont think we'll get outrageous inflation any time soon. The stock market bubble has to pop before the corporations feel comfortable spending again. Right now everyone is just waiting for the stock market to fall, but it cant because the fed keeps pumping it. I think things are going to be in this weird economic limbo for years. High unemployment and stocks going up because the fed just wont let them fail. The economy uncoupling from itself and two separate economies running in parallel. One economy booming for the rich, the other economy in a permeant high unemployment and shit wages for the poor.

>>28201703
Ok so QE from what I understand is
>government buys bonds with money from banks
>banks now have liquidity to loan people
>more loans mean people can grow their business, grow their assets, and etc
>banks can also invest the money into assets
What I dont understand is, why are the feds continuing to pump an absurd about of money on a daily basis?
Do the banks really need this much liquidity right now?
QE seems like a solution after the lock down are lifted since most people cannot work and people in general seem to be tightening up their wallet atm.
Wouldnt it make more sense to do this when everything opens up and people are more willing to spend?

The secret is corruption, OP.

Also crime.

>>28205674
How is the Fed pumping equities?
We can see that the large majority of reserves from QE sit at commercial banks. If you're talking about the corporate bond buying programs, those were too tiny to have any actual impact other than provide firms with temporary liquidity.

>>28205674
This. It's really bizarre to see. What's the next step? Company towns and feudalism?

>>28205826
I think you're getting it but here are some adjustments:
>government (US Treasury) issues bonds at auction
>primary dealer banks buy those bonds with their own money
>the Fed buys those bonds from the primary dealer banks by crediting a reserve balance to their accounts
>dealer banks now have $USD reserves in place of bonds.

The Fed wants to do this mostly to affect interest rates. Taking bonds out of circulation makes them more expensive, making the yield less attractive, so investors in the private market will be more inclined to put their money to work elsewhere. Banks DO need the liquidity as can be seen by the M2 graph. Imagine a "bank run" situation where everyone demanded their USD from bank accounts. Banks need reserve balances to meet that demand or they go bust.
>Wouldnt it make more sense to do this when everything opens up and people are more willing to spend?
Yes interesting how you came to this conclusion too. Lots of big brains have been studying the Japan example, which is like 20 years ahead of ours, and seeing that people DID tighten up their wallets and QE actually made things worse economically.

>>28204149
>g
Kek but this isn't true, "actual programming" is for stack exchange and quora
gee is for either retarded undergrad questions asking what a pointer is or retardedly specific questions for niche tranny programming langs like rust