The reason we should not be concerned about inflation

109,930 Views | 916 Replies | Last: 1 mo ago by Helicopter Ben
Oak Tree
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AG
https://econ.economicshelp.org/2008/04/hyperinflation-causes-costs-and.html?m=1

Quote:

What Causes Hyper Inflation

Usually, countries with hyper inflation have the following features

Large government debt, usually over 100% of GDPPrinting Money. To cope with meeting the debt, the government starts printing money. This decreases the value of existing money creating a multiplier effect where people lose confidence in money and keep demanding wage increases.Reluctance / inability to deal with it. When Germany experienced hyperinflation in the 1920s it was not a phenomena they fully appreciated or understood. Their primary fear at the time was unemployment. They feared that unemployment could precipitate a Communist Revolution so they didn't want to do anything to reduce demand and possibly cause a recession.
I Like Mike
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"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."

FA Hayek
Eliminatus
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Oldag2020 said:

BuddysBud said:

Oldag2020 said:

BuddysBud said:

Oldag2020 said:

Demand is temporarily outpacing our production(supply). Due to covid shut downs and supply chain disruptions. Ex. Lumber prices were inflated, now they are correcting themselves.

Once our supply chains are back up to full capacity, the added demand created by the stimulus will not cause long lasting inflation.

Our productive capacity is so high, in fact, I believe our biggest fear should be deflation, not inflation. Our productivity growth is not disappearing any time soon. The inputs to production are 1. Technological advancements and 2. Increase in labor force. Our computing power doubles every 18 months. Clearly this growth will not disappear.

It's no accident that we have continued to spend more and more throughout the last several decades with little to zero long term negative consequences.

In fact, the fed has struggled the last decade to maintain their inflation level goal of 2%. This even Despite massive spending in 2008 and artificially low interest rates.


Another reason we should not be concerned by the massive spending is that $1 in government spending = greater than $1 in gdp growth.
Gdp growth = 1/ the propensity to save
The propensity to save is currently ~ 20%
Therefore every dollar spent today grows our gdp tomorrow by $5

This $5 of gdp growth then increases tax revenue by $5.
This increase in tax revenue is used to service the debt.

Basically, we can spend as much as we want with little to zero negative consequences. Long term inflation is not on the way.

Be sure to allocate portfolios accordingly.


This reads like a perpetual motion machine.
Put a big fan in front of a windmill to blow on the blades to generate electricity that powers the fan. The fan blowing the windmill will never stop because the windmill keeps turning by the fan blowing on it. Easy.

Look, and endless supply of energy.


That is precisely where we are. I don't believe I could have said it any better!


Since perpetual motion machines are impossible, your post was sarcasm.

You fooled many of us. Good job.


They are in fact, not impossible.

Imagine if you drilled to the earths core, shot water into that hole, and used the steam generated by the earth as a source of power. That is limitless power that theoretically can never run out. The power created by the steam could be used to perpetually power itself, making a perpetual power machine.

This in fact is currently being developed by a team of billionaire investors through one of their family offices.

I am not sarcastic. I fully believe my OP


So you don't know finance OR science.

"Lemme take this imperfect closed system and open it up! Limitless energy!"

As you completely ignore the fact you just created an open system which by definition, defeats perpetual motion. Idiot students in 200 level thermo classes don't even try to postulate this one.

This HAS to be a troll.
Ribeye-Rare
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Oldag2020 said:

Basically, we can spend as much as we want with little to zero negative consequences.
Absurd. Government spending is, almost without exception, much more wasteful and much more prone to inefficient allocation of economic resources than is spending by the private sector. While economic resources are certainly not completely finite, they definitely are subject to restraints that prevent them being supplied in unlimited quantities.

A government owned or favored 'enterprise', lacking the 'stick' of a profit motive to keep it efficient and honest, can virtually never provide the same standard of quality or price that a private sector business can. Moreover, those in government who are granted the authority to choose winners and losers rarely, if ever, have their own skin in the game. Subsidies, grants and all other manner of BS seldom work out for the benefit of the taxpayer, and take resources away from allocations that make economic 'sense'.

Politicians make very poor businessmen. Saying we should give them carte blanche to spend unlimited sums of 'other people's money' is just not sustainable. The examples of history are before your very eyes:

West Germany vs. East Germany
South Korea vs. North Korea
Taiwan vs. China (pre 'opening')

If unlimited government spending is without consequence, why were those economies so damn pitiful? Throw in Venezuela to boot, if you like.

As to the points about technological advances and increased labor supply, it would seem considering that much of the current (and planned) increase in labor supply will be in those who are definitely unskilled and uneducated, they will be the most likely to be replaced by that technology, rather than use that technology to enable the making of a zillion widgets more than we make now.

I will admit that I've been baffled by the relative lack of inflation over last the 15 years. Like the man in the nursing home awaiting his ultimate fate, I've been waiting for it, have yet to see it, but I damn sure know it's coming and it bothers me.

OTOH, part of me thinks we are being 'punked' by OP, and he is really a Chicago-school monetarist like Milton Friedman who is playing the devil's advocate just to screw with us.

If he really is serious, I don't know how 'old' an Ag he could be. Thinking like this would have earned you an F- in the economics department I attended at A&M in the '70s, where the Monetarists were king and we thumbed our noses at the Keynesians down the road on the Berkeley East 40 acres.
Oldag2020
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kb2001 said:

The OP is all pretty much non-sensical gibberish with no basis in reality, but one line in particular is the cornerstone of Keynesian thought, and is one of the dumbest things I've read. I can't fathom how people can believe this. His username seems to mean he's class of 2020, so I can only assume he learned this at TAMU.
Quote:

Another reason we should not be concerned by the massive spending is that $1 in government spending = greater than $1 in gdp growth.
This is one of those almighty benevolent government tropes, where somehow when government spends the $1 it's magical and different. Nevermind the roughly 40% waste in government funded anything, where $1 of spending buys you roughly $.60 of output.

ETA- the post is written like a grade school paper as well, so this points even more to a prof at TAMU being responsible for poisoning this mind


Cross check YOUR sources with,
1. CPA material
2. Leading banks (JP Morgan)
3. Large asset managers
4. Leading economists of current (not of the 1820s of which you people seem to be so fixated on)
5. The fed

That's 5 reputable sources that are all saying the same thing.
BuddysBud
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AG
Oldag2020 said:

BuddysBud said:

Oldag2020 said:

BuddysBud said:

Oldag2020 said:

Demand is temporarily outpacing our production(supply). Due to covid shut downs and supply chain disruptions. Ex. Lumber prices were inflated, now they are correcting themselves.

Once our supply chains are back up to full capacity, the added demand created by the stimulus will not cause long lasting inflation.

Our productive capacity is so high, in fact, I believe our biggest fear should be deflation, not inflation. Our productivity growth is not disappearing any time soon. The inputs to production are 1. Technological advancements and 2. Increase in labor force. Our computing power doubles every 18 months. Clearly this growth will not disappear.

It's no accident that we have continued to spend more and more throughout the last several decades with little to zero long term negative consequences.

In fact, the fed has struggled the last decade to maintain their inflation level goal of 2%. This even Despite massive spending in 2008 and artificially low interest rates.


Another reason we should not be concerned by the massive spending is that $1 in government spending = greater than $1 in gdp growth.
Gdp growth = 1/ the propensity to save
The propensity to save is currently ~ 20%
Therefore every dollar spent today grows our gdp tomorrow by $5

This $5 of gdp growth then increases tax revenue by $5.
This increase in tax revenue is used to service the debt.

Basically, we can spend as much as we want with little to zero negative consequences. Long term inflation is not on the way.

Be sure to allocate portfolios accordingly.


This reads like a perpetual motion machine.
Put a big fan in front of a windmill to blow on the blades to generate electricity that powers the fan. The fan blowing the windmill will never stop because the windmill keeps turning by the fan blowing on it. Easy.

Look, and endless supply of energy.


That is precisely where we are. I don't believe I could have said it any better!


Since perpetual motion machines are impossible, your post was sarcasm.

You fooled many of us. Good job.


They are in fact, not impossible.

Imagine if you drilled to the earths core, shot water into that hole, and used the steam generated by the earth as a source of power. That is limitless power that theoretically can never run out. The power created by the steam could be used to perpetually power itself, making a perpetual power machine.

This in fact is currently being developed by a team of billionaire investors through one of their family offices.

I am not sarcastic. I fully believe my OP


Perpetual motion machines are in fact impossible. It is Newton's Third Law. Drilling into the center of the earth is taking energy from internal heat generation within the earth, primarily nuclear decay. In your example, external energy would be used to heat the water. It would also take a lot of energy to drill that deep and to produce materials that could withstand such extreme pressure and heat. Removing the internal heat for our energy use could eventually cool the earth's interior, thereby ending plate tectonics, which would have real consequences regarding ocean currents, the atmosphere, weather, and climate. Nuclear fusion would also produce what we might consider and endless supply of energy, but it takes energy to start the reaction and energy for containment. Basically it is conversion of potential energy to mechanical energy, as is nuclear fission, and burning wood, coal, oil, and gas. The conversion of potential energy to mechanical produces the excess energy that powers our civilization.

In physics it is impossible to get something from nothing. Economics is the same. Everything has consequences, and it is impossible to just create endless money for unrestrained endless spending by the government without affecting the value of the money.
TRADUCTOR
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Oak Tree said:

I disagree with the OP. The federal government continuously printing money will soon lead to hyperinflation and economic collapse. Republican and Democrat politicians increase spending every year...way beyond the US government's ability to support it. History always repeats itself...do some basic research.

The replies on this thread are childish. If you disagree with the OP then post an intellectual argument or viewpoint.


AKA the printer go brrrr intellectual argument.

When really we are talking about the non intellectuals living hand to mouth saving 20% is a crock. BOOM goes OP.
X was born on October 28, 2022 and should be a national holiday.
Oak Tree
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AG
Conservative posters are in total agreement that unlimited spending and printing money causes inflation or worse. When will conservatives make DC Republicans represent their beliefs?
Oldag2020
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BuddysBud said:

Oldag2020 said:

BuddysBud said:

Oldag2020 said:

BuddysBud said:

Oldag2020 said:

Demand is temporarily outpacing our production(supply). Due to covid shut downs and supply chain disruptions. Ex. Lumber prices were inflated, now they are correcting themselves.

Once our supply chains are back up to full capacity, the added demand created by the stimulus will not cause long lasting inflation.

Our productive capacity is so high, in fact, I believe our biggest fear should be deflation, not inflation. Our productivity growth is not disappearing any time soon. The inputs to production are 1. Technological advancements and 2. Increase in labor force. Our computing power doubles every 18 months. Clearly this growth will not disappear.

It's no accident that we have continued to spend more and more throughout the last several decades with little to zero long term negative consequences.

In fact, the fed has struggled the last decade to maintain their inflation level goal of 2%. This even Despite massive spending in 2008 and artificially low interest rates.


Another reason we should not be concerned by the massive spending is that $1 in government spending = greater than $1 in gdp growth.
Gdp growth = 1/ the propensity to save
The propensity to save is currently ~ 20%
Therefore every dollar spent today grows our gdp tomorrow by $5

This $5 of gdp growth then increases tax revenue by $5.
This increase in tax revenue is used to service the debt.

Basically, we can spend as much as we want with little to zero negative consequences. Long term inflation is not on the way.

Be sure to allocate portfolios accordingly.


This reads like a perpetual motion machine.
Put a big fan in front of a windmill to blow on the blades to generate electricity that powers the fan. The fan blowing the windmill will never stop because the windmill keeps turning by the fan blowing on it. Easy.

Look, and endless supply of energy.


That is precisely where we are. I don't believe I could have said it any better!


Since perpetual motion machines are impossible, your post was sarcasm.

You fooled many of us. Good job.


They are in fact, not impossible.

Imagine if you drilled to the earths core, shot water into that hole, and used the steam generated by the earth as a source of power. That is limitless power that theoretically can never run out. The power created by the steam could be used to perpetually power itself, making a perpetual power machine.

This in fact is currently being developed by a team of billionaire investors through one of their family offices.

I am not sarcastic. I fully believe my OP


Perpetual motion machines are in fact impossible. It is Newton's Second Law. Drilling into the center of the earth is taking energy from internal heat generation within the earth, primarily nuclear decay. In your example, external energy would be used to heat the water. It would also take a lot of energy to drill that deep and to produce materials that could withstand such extreme pressure and heat. Removing the internal heat for our energy use could eventually cool the earth's interior, thereby ending plate tectonics, which would have real consequences regarding ocean currents, the atmosphere, weather, and climate. Nuclear fusion would also produce what we might consider and endless supply of energy, but it takes energy to start the reaction and energy for containment. Basically it is conversion of potential energy to mechanical energy, as is nuclear fission, and burning wood, coal, oil, and gas. The conversion of potential energy to mechanical produces the excess energy that powers our civilization.

In physics it is impossible to get something from nothing. Economics is the same. Everything has consequences, and it is impossible to just create endless money for unrestrained endless spending by the government without affecting the value of the money.


I'll leave it to the billionaires to decide what investments they should pursue.
Oldag2020
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Ribeye-Rare said:

Oldag2020 said:

Basically, we can spend as much as we want with little to zero negative consequences.
Absurd. Government spending is, almost without exception, much more wasteful and much more prone to inefficient allocation of economic resources than is spending by the private sector. While economic resources are certainly not completely finite, they definitely are subject to restraints that prevent them being supplied in unlimited quantities.

A government owned or favored 'enterprise', lacking the 'stick' of a profit motive to keep it efficient and honest, can virtually never provide the same standard of quality or price that a private sector business can. Moreover, those in government who are granted the authority to choose winners and losers rarely, if ever, have their own skin in the game. Subsidies, grants and all other manner of BS seldom work out for the benefit of the taxpayer, and take resources away from allocations that make economic 'sense'.

Politicians make very poor businessmen. Saying we should give them carte blanche to spend unlimited sums of 'other people's money' is just not sustainable. The examples of history are before your very eyes:

West Germany vs. East Germany
South Korea vs. North Korea
Taiwan vs. China (pre 'opening')

If unlimited government spending is without consequence, why were those economies so damn pitiful? Throw in Venezuela to boot, if you like.

As to the points about technological advances and increased labor supply, it would seem considering that much of the current (and planned) increase in labor supply will be in those who are definitely unskilled and uneducated, they will be the most likely to be replaced by that technology, rather than use that technology to enable the making of a zillion widgets more than we make now.

I will admit that I've been baffled by the relative lack of inflation over last the 15 years. Like the man in the nursing home awaiting his ultimate fate, I've been waiting for it, have yet to see it, but I damn sure know it's coming and it bothers me.

OTOH, part of me thinks we are being 'punked' by OP, and he is really a Chicago-school monetarist like Milton Friedman who is playing the devil's advocate just to screw with us.

If he really is serious, I don't know how 'old' an Ag he could be. Thinking like this would have earned you an F- in the economics department I attended at A&M in the '70s, where the Monetarists were king and we thumbed our noses at the Keynesians down the road on the Berkeley East 40 acres.



The reason for no long term inflation(yes we have transitory inflation) is simply that our productive capacity is so high. We are extremely efficient and can produce much much more than we are producing. It's this simple. Productivity and production far outpace our demand. This should be worrying to us all. It is a serious deflationary risk.

It's why both parties, democrats and conservatives, are becoming so adamant about increasing spending.
jefe95
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AG
This is so dumb.

I can't even formulate an argument fir why this is dumb. It seriously defies all aspects of economics and common sense.
TxAgPreacher
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S
I think I lost a few IQ points from reading OP.

I don't have enough to spare. So I won't be reading another OP from this "old ag".
Oak Tree
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Quote:

its why both parties, democrats and conservatives, are becoming so adamant about increasing spending.


You mean Democrats and faux-Republicans politicians. Conservatives dont want more spending, but are incapable of electing Republicans that represent their beliefs.
kb2001
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Oldag2020 said:

kb2001 said:

The OP is all pretty much non-sensical gibberish with no basis in reality, but one line in particular is the cornerstone of Keynesian thought, and is one of the dumbest things I've read. I can't fathom how people can believe this. His username seems to mean he's class of 2020, so I can only assume he learned this at TAMU.
Quote:

Another reason we should not be concerned by the massive spending is that $1 in government spending = greater than $1 in gdp growth.
This is one of those almighty benevolent government tropes, where somehow when government spends the $1 it's magical and different. Nevermind the roughly 40% waste in government funded anything, where $1 of spending buys you roughly $.60 of output.

ETA- the post is written like a grade school paper as well, so this points even more to a prof at TAMU being responsible for poisoning this mind


Cross check YOUR sources with,
1. CPA material
2. Leading banks (JP Morgan)
3. Large asset managers
4. Leading economists of current (not of the 1820s of which you people seem to be so fixated on)
5. The fed

That's 5 reputable sources that are all saying the same thing.
No, they are not. Prove your point, if you're so certain. I'm ready to eat crow if you can prove it. It's a fallacy of Keynesian thought that has proven itself false numerous times.

Also, which professor gave you this info? I would to know who poisoned you
Ags4DaWin
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Oldag2020 said:

Demand is temporarily outpacing our production(supply). Due to covid shut downs and supply chain disruptions. Ex. Lumber prices were inflated, now they are correcting themselves. I know people in manufacturing and supply chain management and not just on the final products end but people who manufacture the equipment used in factories that make ***** The amount of product on backorder is crazy high. Its gonna take well over a year to catch back up minimum. First the people who make things that factories use to make things must catch up...and i have seen some backorders and estimates of over a year for those pieces. Then the factories which it will take at least that long before they are operating at full capacity will have to start operating at full capacity and catch up on THEIR backlog of final products. What that does to the economy overall- generally will not be good

Once our supply chains are back up to full capacity, we are looking at a year the added demand created by the stimulus will not cause long lasting inflation. we are talking demand from people with more play money due to stimulus on top of demand due to backlogs and backordersfrom year long shut downs and supply chain disruptions on top of demand as people get back to life and want to do something special since they have not been able to do that stuff in a year. Those are alot of added pressures to pent up demand. You are grossly overestimating how ling it will take for supply to catch up and meet that demand

Our productive capacity is so high, in fact, I believe our biggest fear should be deflation, not inflation. Our productivity growth is not disappearing any time soon. The inputs to production are 1. Technological advancementsAdvancements mean jack **** if you cannot manufacture the parts to implement them. The people who make the parts to make the machines who have millions in backorders when they usually have a few thousand. I have seen the logs and it is staggering. The files containing the backorders are so big the normal method of sending them cannot handle the file sizes. and 2. Increase in labor force. How many open jobs were there compared to jobless claims recently? Stimulus and a year shut down has torn the labor force to shreds. Now we have a large segment of the population clamoring for another round of stimulus that they do not need and a federal government that does not have the balls to tell them no. Our computing power doubles every 18 months. Clearly this growth will not disappear.

It's no accident that we have continued to spend more and more throughout the last several decades with little to zero long term negative consequences.

In fact, the fed has struggled the last decade to maintain their inflation level goal of 2%. This even Despite massive spending in 2008 and artificially low interest rates.


Another reason we should not be concerned by the massive spending is that $1 in government spending = greater than $1 in gdp growth. This is bull***** Time and time again studies have shown that for every dollar spent by the government 50 cents or less gets to the intended target and the rest is swallowed up by beaurocrats, regulatory agencies, and other factors that produce nothing. These pennies trickle away at levels that have very little positive impact on the economy because the government produces nothing of intrinsic value. GDP growth in the private sector is what grows the economy because that is where production happens.
Gdp growth = 1/ the propensity to save
The propensity to save is currently ~ 20%
Therefore every dollar spent today grows our gdp tomorrow by $5

This $5 of gdp growth then increases tax revenue by $5. Wrong. Your assumption depends on taxes on GDP growth are 100%. Which is awful. Awfully wrong. Theaximum capital gains rate i 20% and the top income tax rate is 37%. So at best the tax revenue increase for a GDP growth of $5 is $1.85 depending on where that growth is happening. And if its corporations, not workers seeing the majority of growth, its considerably less than that.
This increase in tax revenue is used to service the debt.

Basically, we can spend as much as we want with little to zero negative consequences. Long term inflation is not on the way.

Be sure to allocate portfolios accordingly.


In short Mr. Madison, what you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.
Grapes
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I'm buying what OP is saying.

As far as I can remember, people have been screaming that the government is just printing money and its all going to come crashing down.

Inflation, hyper inflation!!!

There is far more evidence in support of OP's suggestions than there is in everyone else's future doom and gloom.

Ags4DaWin
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Everyone said that about this sort of monetary policy.

And then Greece happened. Remember that?

We have been sheltered because the dollar has been the reserve currency for so long.

When interest payments on government debt are so large we are struggling to borrow to cover them- which is around the corner.
When our adversaries overseas find it advantageous to follow through on threats of conducting oil transactions in other currencies.
When oil is no longer in as high demand because of EV's that tying oil value to the dollar is not as meaningful.

Things will shift quickly.

How many of these factors are already in motion?
Grapes
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Greece was not the worlds reserve currency.

What does it matter if China convinces its sphere of influence to do business in the yuan. The entire world is not going to abandon the US.

Absolute worst case conservative Americans get what they want. An isolated America.
Grapes
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Also the fastest way for the US to eliminate its debt is hyper inflation.

Problem solved, debt crisis averted. Also reparations crisis resolved. Inequality issue resolved. Income inequality issue reset.

Everyone back to zero!
Grapes
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If you don't want to be on the losing end of the impending doom of runaway inflation just start loading up on debt.

Otherwise you're a loser.
TAMUallen
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AG
Let's throw in some retroactive capital gains taxes! Plus tax hikes. That'll help all of this inflation concern! Oh and how about permanent covid benefits for everybody?! Extra spending power with no consequence, for sure?

I mean they're actually saving on taxes if their dollars are worth far less. Win win right?
Ags4DaWin
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Grapes said:

Also the fastest way for the US to eliminate its debt is hyper inflation. Yes! Germany did this to pay back its WW1 reparations. Worked great for people who had to wheel barrow cash to buy a loaf of bread. Also the societal consequences of the economic upheaval in no way contributed to the rise of the Nazi party and civil strife that ensued. LET'S DO THAT!

Problem solved, debt crisis averted. Also reparations crisis resolved. Inequality issue resolved. Income inequality issue reset.

Everyone back to zero!
mazag08
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AG
TheMasterplan said:

The transitory explanation makes some sense.I'm not convinced it's true.

As far as the fed goes, take a look at historical interest rates.

They peaked sometime in the 70s or 80s I believe and dropped to create growth after a crash and every time the fed tried to raise rates to get back to normal there was another crash. Then they dropped rates again. It's been a downward trend line since.

The fed has never even got close to that peak again and now we're at zero to near zero since 2008. The fed is what is causing these economic crashes in the first place.


The FED doesn't do anything. They merely follow the market and take credit for what market sentiment has already done.
Win Smith
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My understanding is that too much inflation happens when the money supply increases by a lot more than production. I don't know much about all that fancy economics you're talking about (and I sure don't know anything about the closed/open system drilling to earth's core stuff) but it sure seems like production in the US didn't increase in the past year and a half but the money supply sure as hell increased a lot.
rab79
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AG
Oldag2020 said:

BuddysBud said:

Oldag2020 said:

Demand is temporarily outpacing our production(supply). Due to covid shut downs and supply chain disruptions. Ex. Lumber prices were inflated, now they are correcting themselves.

Once our supply chains are back up to full capacity, the added demand created by the stimulus will not cause long lasting inflation.

Our productive capacity is so high, in fact, I believe our biggest fear should be deflation, not inflation. Our productivity growth is not disappearing any time soon. The inputs to production are 1. Technological advancements and 2. Increase in labor force. Our computing power doubles every 18 months. Clearly this growth will not disappear.

It's no accident that we have continued to spend more and more throughout the last several decades with little to zero long term negative consequences.

In fact, the fed has struggled the last decade to maintain their inflation level goal of 2%. This even Despite massive spending in 2008 and artificially low interest rates.


Another reason we should not be concerned by the massive spending is that $1 in government spending = greater than $1 in gdp growth.
Gdp growth = 1/ the propensity to save
The propensity to save is currently ~ 20%
Therefore every dollar spent today grows our gdp tomorrow by $5

This $5 of gdp growth then increases tax revenue by $5.
This increase in tax revenue is used to service the debt.

Basically, we can spend as much as we want with little to zero negative consequences. Long term inflation is not on the way.

Be sure to allocate portfolios accordingly.


This reads like a perpetual motion machine.
Put a big fan in front of a windmill to blow on the blades to generate electricity that powers the fan. The fan blowing the windmill will never stop because the windmill keeps turning by the fan blowing on it. Easy.

Look, and endless supply of energy.


That is precisely where we are. I don't believe I could have said it any better!
op is as ignorant about physics as they are about economics
NO AMNESTY!

in order for democrats, liberals, progressives et al to continue their illogical belief systems they have to pretend not to know a lot of things; by pretending "not to know" there is no guilt, no actual connection to conscience. Denial of truth allows easier trespass.
TAMUallen
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AG
Win Smith said:

My understanding is that too much inflation happens when the money supply increases by a lot more than production. I don't know much about all that fancy economics you're talking about (and I sure don't know anything about the closed/open system drilling to earth's core stuff) but it sure seems like production in the US didn't increase in the past year and a half but the money supply sure as hell increased a lot.


Get out of here rookie! These are unheard of thoughts. You must accept that the world shut down because of Covid and that is the only problem.
mazag08
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Oak Tree said:

https://econ.economicshelp.org/2008/04/hyperinflation-causes-costs-and.html?m=1

Quote:

What Causes Hyper Inflation

Usually, countries with hyper inflation have the following features

Large government debt, usually over 100% of GDPPrinting Money. To cope with meeting the debt, the government starts printing money. This decreases the value of existing money creating a multiplier effect where people lose confidence in money and keep demanding wage increases.Reluctance / inability to deal with it. When Germany experienced hyperinflation in the 1920s it was not a phenomena they fully appreciated or understood. Their primary fear at the time was unemployment. They feared that unemployment could precipitate a Communist Revolution so they didn't want to do anything to reduce demand and possibly cause a recession.



They should at least cite Friedman if they are going to base their writings on his teachings.

Great post.
Oak Tree
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AG
Grapes said:

Greece was not the worlds reserve currency.

What does it matter if China convinces its sphere of influence to do business in the yuan. The entire world is not going to abandon the US.

Absolute worst case conservative Americans get what they want. An isolated America.


Conservatives want the Fed to stop printing money, the House to massively reduce spending, and pay off the debt. Conservatives will never get what they want because the DC Republicans don't represent them.

Democrats are giving US enemies, China and Russia, money and control over our country. Is being against that make me an isolationist?
Bob Knights Paper Hands
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Oldag2020 said:


Imagine if you drilled to the earths core, shot water into that hole, and used the steam generated by the earth as a source of power. That is limitless power that theoretically can never run out. The power created by the steam could be used to perpetually power itself, making a perpetual power machine.

OP is either trolling or lives on another dimensional plane where the conservation of mass and energy laws are invalid. I'm so excited. I'm so scared.
MouthBQ98
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AG
Study Japan, it's national debt, and the collapse of the yen in the 1980's.
cisgenderedAggie
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BuddysBud
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AG
Oldag2020 said:

BuddysBud said:

Oldag2020 said:

BuddysBud said:

Oldag2020 said:

BuddysBud said:

Oldag2020 said:

Demand is temporarily outpacing our production(supply). Due to covid shut downs and supply chain disruptions. Ex. Lumber prices were inflated, now they are correcting themselves.

Once our supply chains are back up to full capacity, the added demand created by the stimulus will not cause long lasting inflation.

Our productive capacity is so high, in fact, I believe our biggest fear should be deflation, not inflation. Our productivity growth is not disappearing any time soon. The inputs to production are 1. Technological advancements and 2. Increase in labor force. Our computing power doubles every 18 months. Clearly this growth will not disappear.

It's no accident that we have continued to spend more and more throughout the last several decades with little to zero long term negative consequences.

In fact, the fed has struggled the last decade to maintain their inflation level goal of 2%. This even Despite massive spending in 2008 and artificially low interest rates.


Another reason we should not be concerned by the massive spending is that $1 in government spending = greater than $1 in gdp growth.
Gdp growth = 1/ the propensity to save
The propensity to save is currently ~ 20%
Therefore every dollar spent today grows our gdp tomorrow by $5

This $5 of gdp growth then increases tax revenue by $5.
This increase in tax revenue is used to service the debt.

Basically, we can spend as much as we want with little to zero negative consequences. Long term inflation is not on the way.

Be sure to allocate portfolios accordingly.


This reads like a perpetual motion machine.
Put a big fan in front of a windmill to blow on the blades to generate electricity that powers the fan. The fan blowing the windmill will never stop because the windmill keeps turning by the fan blowing on it. Easy.

Look, and endless supply of energy.


That is precisely where we are. I don't believe I could have said it any better!


Since perpetual motion machines are impossible, your post was sarcasm.

You fooled many of us. Good job.


They are in fact, not impossible.

Imagine if you drilled to the earths core, shot water into that hole, and used the steam generated by the earth as a source of power. That is limitless power that theoretically can never run out. The power created by the steam could be used to perpetually power itself, making a perpetual power machine.

This in fact is currently being developed by a team of billionaire investors through one of their family offices.

I am not sarcastic. I fully believe my OP


Perpetual motion machines are in fact impossible. It is Newton's Second Law. Drilling into the center of the earth is taking energy from internal heat generation within the earth, primarily nuclear decay. In your example, external energy would be used to heat the water. It would also take a lot of energy to drill that deep and to produce materials that could withstand such extreme pressure and heat. Removing the internal heat for our energy use could eventually cool the earth's interior, thereby ending plate tectonics, which would have real consequences regarding ocean currents, the atmosphere, weather, and climate. Nuclear fusion would also produce what we might consider and endless supply of energy, but it takes energy to start the reaction and energy for containment. Basically it is conversion of potential energy to mechanical energy, as is nuclear fission, and burning wood, coal, oil, and gas. The conversion of potential energy to mechanical produces the excess energy that powers our civilization.

In physics it is impossible to get something from nothing. Economics is the same. Everything has consequences, and it is impossible to just create endless money for unrestrained endless spending by the government without affecting the value of the money.


I'll leave it to the billionaires to decide what investments they should pursue.


It's their money to waste.
There are other more practical "limitless" energy sources that are much closer to being possible, such as nuclear fusion.

I wonder what these billionaires plan to use for casing that could withstand the heat and pressure. Diamond?
Nitro Power
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AG
You are still with this ***** First time it was humorous, now it's pathetic. Devaluation of money is not a good thing. Hope this helps.
Helicopter Ben
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kb2001 said:

ETA- the post is written like a grade school paper as well, so this points even more to a prof at TAMU being responsible for poisoning this mind

Unfortunately, I think you're right. And I don't think this is a troll. My MIL is an economics professor and this is almost exactly what she believesand teaches.

While it's kind of funny to observe such insanity, these beliefs are currently manifesting themselves into real-world policies. It's like we've let a blind, insane person take the driver's seat and we're plummeting down a huge hill straight for a cliff. And nobody is stopping them.

The one thing I'm not sure of is if the people in power truly believe this. It defies all logic yet they persist no matter how much evidence, history, or reason you present them with. I think the truly powerful people behind the scenes know it's all bull****, but it's just a good way to harvest the wealth of an entire population.

When you point out that history is littered with examples of governments who have done the exact same thing only to end in ruin, they respond with something along the lines of "the world will never abandon the dollar." In other words nuh uh!

Every single fiat currency in history has gone to zero and ultimately been discarded. This destroys the value of savings and transfers wealth from the productive to the non productive. How they can argue against it is pure insanity. They are flat out wrong and I'm tired of arguing.

The OP even said he's more worried about deflation. As if falling prices and a lower cost of living are somehow a bad thing. Again, pure insanity! Orwellian back-asswards nonsense. The natural order is for most things to get less expensive. Yet somehow the government has convinced people that it's good for them to lose purchasing power over time.


Oldag2020
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AG
Helicopter Ben said:

kb2001 said:

ETA- the post is written like a grade school paper as well, so this points even more to a prof at TAMU being responsible for poisoning this mind

Unfortunately, I think you're right. And I don't think this is a troll. My MIL is an economics professor and this is almost exactly what she believesand teaches.

While it's kind of funny to observe such insanity, these beliefs are currently manifesting themselves into real-world policies. It's like we've let a blind, insane person take the driver's seat and we're plummeting down a huge hill straight for a cliff. And nobody is stopping them.

The one thing I'm not sure of is if the people in power truly believe this. It defies all logic yet they persist no matter how much evidence, history, or reason you present them with. I think the truly powerful people behind the scenes know it's all bull****, but it's just a good way to harvest the wealth of an entire population.

When you point out that history is littered with examples of governments who have done the exact same thing only to end in ruin, they respond with something along the lines of "the world will never abandon the dollar." In other words nuh uh!

Every single fiat currency in history has gone to zero and ultimately been discarded. This destroys the value of savings and transfers wealth from the productive to the non productive. How they can argue against it is pure insanity. They are flat out wrong and I'm tired of arguing.

The OP even said he's more worried about deflation. As if falling prices and a lower cost of living are somehow a bad thing. Again, pure insanity! Orwellian back-asswards nonsense. The natural order is for most things to get less expensive. Yet somehow the government has convinced people that it's good for them to lose purchasing power over time.





https://www.economicshelp.org/blog/978/economics/definition-of-deflation/
 
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