Inflation

[PRCD]

How bad do you think it's going to get? I've heard warnings of hyperinflation for probably a couple of decades and it hasn't happened because MMT (?). I now think economic and monetary theories are just post hoc rationalizations for what TPTB are doing anyway and have no effect on the ground. Looking at the money supply and feeling the price impact, I'm concerned. Looks like close to 30 trillion has been dumped into circulation in a single year.

Obviously, a lot of the cash has gone straight into REITs and into US property property. A lot of the USD that went overseas came back and went into US property. Hence our latest housing bubble. Taking on property debt is a great inflation hedge because you can sooner or later pay off the note with cash that's worth much less.

How bad do you think it's going to get and what are you doing? Most importantly, do you have enough pairs of assless chaps to last you through a possible monetary meltdown?

 

[GromsDad]

Bottom line is that all that money they are dumping into the economy out of thin air just devalues existing currency. Another way of thinking of it is as a tax increase without ever raising taxes.

 

[Duffy LaCoronilla]

Wait, so if you print a bunch of money and pay people not to work it will cause inflation?

Who knew...

 

[grapedrink]

Bottom line is that all that money they are dumping into the economy out of thin air just devalues existing currency. Another way of thinking of it is as a tax increase without ever raising taxes.

Thanks Trump!

 

[kidfury]

I predict that gromsdad and hal will eventually start insulting each other on this thread

 

[Autoprax]

At what age do surfers start thinking about inflation?

 

[VonMeister]

At what age do surfers start thinking about inflation?

When gas and beer get too expensive to afford.

 

[PRCD]

Bottom line is that all that money they are dumping into the economy out of thin air just devalues existing currency. Another way of thinking of it is as a tax increase without ever raising taxes.

You can really see when the MMT regime began: 2009. Shortly thereafter, people were writing books on how this was actually a good thing.


I think most of the new money since 2009 has gone to inflate new asset bubbles in the stock and real estate markets. Boomers love it because their house is now worth 4x what they paid. Their kids hate it because they can afford nothing, and don't seem happy (take that, Klaus Schwab).

 

[enframed]

Be afraid, be very afraid.

 

[GromsDad]

Meanwhile here is what Gross Domestic Product has done over the same period of time. Its way out of whack.

 

[PRCD]

Meanwhile here is what Gross Domestic Product has done over the same period of time. Its way out of whack.

View attachment 109187

Right. You need to plot the GDP on a linear scale but the money supply on a log Y scale.

 

[GromsDad]

At what age do surfers start thinking about inflation?

When dad no longer pays for their board quivers?

 

[GromsDad]

Right. You need to plot the GDP on a linear scale but the money supply on a log Y scale.

Ideally the graphs would follow similar trends.

 

[Autoprax]

I'm not even thinking about it now.

What control do I have over it?

Live beneath your means is the key.

 

[VonMeister]

I'm not even thinking about it now.

What control do I have over it?

Live beneath your means is the key.

Liquidity is key. It allows you to take advantage of economic turmoil or lapses. For the most part the very wealthy didn't get that way by simply working hard. Frugality and timely investment are the key to financial independence. Your 401k, pension, and social security will not pace inflation and will leave you living on a budget and having to make decisions on what to go without.

 

[PRCD]

Ideally the graphs would follow similar trends.

I'm told that idea - that the money supply should increase with GDP/productivity - is passe because MMT <reasons>.

I'm not even thinking about it now.

What control do I have over it?

Live beneath your means is the key.

What if your means keep dropping because of inflation? You could end up paying for your next meal with your *ss or your mouth.

 

[GromsDad]

Your 401k, pension, and social security will not pace inflation and will leave you living on a budget and having to make decisions on what to go without.

This ^^^^

 

[hal9000]

live in fear of inflation.

open carry is the only way to prevent it.

 

[PRCD]

Your 401k, pension, and social security will not pace inflation and will leave you living on a budget and having to make decisions on what to go without.

"Will your 401(k) pace inflation?" I guess it depends on what the stock market does and how they define and measure inflation. The Fed is saying this is all temporary due to supply constrictions and pent-up demand. Charlie Munger and I aren't so sure. What if there is falling confidence in the currency itself? The rest of the world seems to be losing confidence in the USD as a reserve currency. The move into crypto seems to be suggesting that Americans are losing confidence in their fiat currency. Will the stock market pace this? I don't think it can. Stocks are not liquid and have to be converted to local currencies to buy anything. Also, stock increases do not necessarily mean the company is producing more actual value, and people seem to be realizing this. This begs the question, "What else do you do with money?" Some people are buying eBikes and boards.

I think we should ask, "In what ways is America like and unlike the Weimar Republic?" History often rhymes.

 

[Autoprax]

What if your means keep dropping because of inflation? You could end up paying for your next meal with your *ss or your mouth.

The Stoics would say that is why we train.