If 1 $ of qe = $0.50 inflation. And 1 $ of helicopter money = $1.
Where did you see that 1 dollar of QE = $0.50 inflation?
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If 1 $ of qe = $0.50 inflation. And 1 $ of helicopter money = $1.
Your mom's vagina. It's really quite well documented. Perhaps start with the CATO document I sent youWhere did you see that 1 dollar of QE = $0.50 inflation?
It's really quite well documented. Perhaps start with the CATO document I sent you
Reach for it with your tiny pecker. I'm at the gymLink it again.
Reach for it with your tiny pecker. I'm at the gym
So now you hate gays? LolGonna take it up the ass in the locker room again?
So now you hate gays? Lol
Toro I'm on my phone and can't reply to you properly but I can give you paper after paper from central bank after central bank that says you're wrong about gold being just a commodity.I have an Honours degree in economics and finance, and have been involved in the capital markets in various roles for nearly 30 years. I have an MBA and am a CFA. I have donated a wall of books on economics, finance and investments to my employer. I've lectured to Master's students and was offered a teaching position at a university.
I skimmed this branch. A few points
- Massive deficit spending is generally inflationary. Deficit spending increases both currency and demand so prices go up. That's a big reason why we have inflation now. Reducing deficit spending is not inflationary.
- Massive debt is generally deflationary. Too much debt limits growth, which limits price increases. Deficit spending increases the debt, so they are linked. But it is not necessarily the case that any year's deficit spending is deflationary.
- Fundamentally, deflation is a threat because of massive debt and also demographics. An older population is deflationary because they spend less and save more. But fiscal and monetary policy can overwhelm these fundamental issues.
- Deleveraging is deflationary, but America does not necessarily need to deleverage. We don't know what level of debt requires deleveraging. "Debt" includes not just government debt, but also corporate and consumer debt relative to GDP.
- What matters to currencies is not debt or deficits but interest rates. Interest rate differentials between countries drive relative currency values.
- It is true that the level of debt will have an effect on interest rates, but it's not necessarily true that high inflation means high interest rates. Today, the 10 year is at 2.9% and inflation is 8.5%. The last time inflation was at 8.5%, the 10 year was at 13%. What matters is inflation expectations.
- That 1987 GAO report is in the context of that time. It's not a general theory of inflation.
- Treasury bonds are currently considered the safest assets in markets. They are used as collateral in the repo markets, whose interest rates are used as benchmarks for all sorts of credit markets.
- Treasuries owned by the Federal Reserve are assets. They will not be falling by 90%. Nobody thinks this way. Or at least nobody who matter in markets.
- Gold does not matter as a monetary asset of the Federal Reserve. I've made $50 million for my employer trading gold. I love gold. But I'm not a gold bug. Gold is a commodity. It is not an ideology nor a religion. It was money up until the 1920s but it is no longer, and never will be again. Looking at the monetary system through a gold lens is so 100 years ago.
- Banks are not capitalized with gold, including the 12 Federal Reserve banks.
- The value of Treasuries would rise, not fall, if the US government balanced it's books. That's because investors would have more confidence in the creditworthiness of the US government, and bond prices would rally.
- The US Treasury does not give the Federal Reserve dollars. Dollars are created by the Federal Reserve.
- We are not on the edge of a depression. Growth remains strong.
- The US dollar is the global reserve currency because of the dynamism of the American economy, the transparency of the US banking system, the convertibility of the US dollar, the rule of law, and the American military. No economy on earth comes close to matching the US on all of these. Thus, the US dollar will continue to be the global reserve currency for a long time to come. However ...
- I am sympathetic to arguments that massive government deficits and massive Fed stimulus could create a currency crisis. That probability is still not likely, but it is a non-zero event, and much higher than it was three years ago.
Toro I'm on my phone and can't reply to you properly but I can give you paper after paper from central bank after central bank that says you're wrong about gold being just a commodity.
It's an asset (regardless if it's a commodity) and the Federal Reserve owns theirs at about $42 bucks. Quite the capital gain.
The treasury if ever to take possession of the Fed reserve balance sheet would let gold rise against the federal reserve note
I belive gold here is short term weak but medium term very very likely to 1.5x or 2x.I am long and strong commodities right now, particularly oil. I also own copper, but am waiting for it to fall before loading up the boat again. I owned gold and silver until a few weeks ago.
But a commodity can still be an asset and still be a commodity.
The Treasury cannot take possession of the Federal Reserve's balance sheet by law. The Fed is a separate legal entity.
The treasury would take possession of the Fed Balance sheet in the event that the Congress removed the Fed charter. I just don't enumerate every step.I am long and strong commodities right now, particularly oil. I also own copper, but am waiting for it to fall before loading up the boat again. I owned gold and silver until a few weeks ago.
But a commodity can still be an asset and still be a commodity.
The Treasury cannot take possession of the Federal Reserve's balance sheet by law. The Fed is a separate legal entity.
I belive gold here is short term weak but medium term very very likely to 1.5x or 2x.
Look at the behavior in every other big liquidity draw down.
Ever read the paper "The behaviour of gold in deflation."?
Look it up. Gold does well when inflation accelerates. It pulls back at the peak. Then does even better in deflationary environs
The paper I refer to studies deflation through out the 60s to 90s. Well past the decoupling of gold standards aka price controls.The case for gold during deflation is based on the 1930s when we had deflation. But gold outperformed during that time because its price was pegged. It was not a free market.
During liquidity withdrawals, gold declines because all risk assets decline. During the Global Financial Crisis, gold fell 25% peak to trough. (Silver fell 60%.) It fell during the pandemic panic in the first quarter of 2020.
Gold does well not when inflation increases but when the change in real interest rates expectations decreases. Real interest rate expectations have been rising. That's why gold has struggled over the past year or so.
As for liquidity draw downs you're only correct for the initial draw down. In every instance from say...pre 1987 crash or in Dec 2007 to mid 2008 etc. It drew down. But after. Woah what a pop. And that's because the liquidity draw downs eventually illicit a recapitalization response.The case for gold during deflation is based on the 1930s when we had deflation. But gold outperformed during that time because its price was pegged. It was not a free market.
During liquidity withdrawals, gold declines because all risk assets decline. During the Global Financial Crisis, gold fell 25% peak to trough. (Silver fell 60%.) It fell during the pandemic panic in the first quarter of 2020.
Gold does well not when inflation increases but when the change in real interest rates expectations decreases. Real interest rate expectations have been rising. That's why gold has struggled over the past year or so.