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Thread: Getting very Late in the Game...

  1. #101

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    Quote Originally Posted by Ryanferr View Post
    Well, lowering rates and expanding balance sheets is just traditional classic counter-cyclical monetary policy, so no surprise all the central banks would move in concert, particularly for an event such as COVID that impacted the entire globe. I do agree that there can be secondary effects to wealth inequality when the only tool being used is monetary policy, but that's precisely why policy makers have unshackled fiscal policy this time around and are pursuing historically aggressive direct payment policies. The low rates of the bond market reflected low inflation expectations that were primarily driven by low growth expectations as the recovery coming out of the GFC was indeed quite slow and drawn out. Now that Powell and Company have signaled (and reiterated again yesterday) they will be prioritizing employment (aka growth) over inflation concerns. Moreover, the Fed has signaled they will not raise rates until various economic targets have been achieved and reflected in the data, whereas in the past they have hiked pre-emptively in anticipation of inflation. So now we're seeing rates rise as the opposite of the prior equation unravels. Higher growth expectations = higher inflation expectations = higher yields.
    I would think that large numbers of people out of work, living on stimulus money, would cause reduced goods/services in the markets at a time when more money would be present & that would tend to feed inflation.

  2. #102

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    Quote Originally Posted by SilverPalm View Post
    I would think that large numbers of people out of work, living on stimulus money, would cause reduced goods/services in the markets at a time when more money would be present & that would tend to feed inflation.
    Well, you have to look at both sides of the supply and demand equation. The economy got absolutely crushed from an employment perspective, so the AD side of the equation was negatively impacted. Keep in mind COVID-19 caused an absolutely biblical number of people to become unemployed (this cover from the NYT captures it well: https://static01.nyt.com/images/2020...tpage/scan.pdf). So many it dwarfed 2008/2009 and broke all the historical charts. Millions of individuals and thousands of businesses were doing their best just to stay above water. The result was a big decline in price indexes for a lot of big ticket areas....urban rents fell, energy prices fell, anything related to leisure fell (airlines, hotels, cruises, gaming, sports), advertising rates declined, auto insurance rates fell, gyms and restaurants and drycleaners saw sales fall to $0 over night, etc, etc. Yes folks got stimulus payments, but these were episodic, largely offset lost income, and for many this money went to savings (savings rate spiked during this time) or covering basic necessities, not really ballin' out. Prices did rise in other categories as spending mix shifted (consumer goods, used autos, PPE, lumber, etc) as COVID also caused a supply shock as producers and supply chains were forced to shutdown, but in the aggregate inflation was quite low in 2020 as the stimulus efforts worked to offset the declines in demand. Things have normalized to a degree now which makes it harder to remember how bad March and April of last year were. Many businesses didn't know if they would be around in 2-3 months.

    At the end of the day the whole objective of counter-cyclical policy is to offset the declines in demand through government spending. It is inflationary in the sense it supports aggregate demand, but it doe so at a time when aggregate demand is falling, thus you've got two countering forces at play which more or less offset each other with the hopes your counter-cyclical policy is scaled sufficiently large enough to offset the deflationary forces entirely. This, combined with the fact prior recessions were primarily addressed via monetary policy rather than fiscal, is why we haven't seen crazy inflation during or coming immediately out of any recession in recent US history.
    Last edited by Ryanferr; 03-20-2021 at 10:37 AM.
    The answers are in the data

  3. #103

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    US dollar hegemony is looking fragile.
    https://www.theguardian.com/business...ooking-fragile

  4. #104

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    Quote Originally Posted by everything1 View Post
    US dollar hegemony is looking fragile.
    https://www.theguardian.com/business...ooking-fragile
    'Exorbitant Privilege' (u.s. 'Dollar')

    This Guy>>>> https://www.youtube.com/watch?v=4qEudOV3RBQ Thinks he UNDERSTANDS it..
    I Have Already Proven Myself WRONG.
    Fundamentals SEEM To NOT Matter..
    Bitcoin at $60,000 u.s. Dollars a 'Coin'
    TOO F#CKING Weird for me...
    x3

  5. #105

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    At the end of the day the whole objective of counter-cyclical policy is to offset the declines in demand through government spending. It is inflationary in the sense it supports aggregate demand, but it doe so at a time when aggregate demand is falling, thus you've got two countering forces at play which more or less offset each other with the hopes your counter-cyclical policy is scaled sufficiently large enough to offset the deflationary forces entirely. This, combined with the fact prior recessions were primarily addressed via monetary policy rather than fiscal, is why we haven't seen crazy inflation during or coming immediately out of any recession in recent US history.[/QUOTE]

    Counter- cyclical policy implies that when things are hot you do the opposite ( credit and deficit contraction) or when things are neutral you return to neutral policy
    This recession ( created in large part by government decree, not by market forces) had off the chart fiscal stimulus applied ( evidenced by massive deficit spending)
    and off the chart monetary accommodation ( evidenced by 0 interest rates and balance sheet expansion and incredible increase in M2)

    There is no counter cyclical in this 21st century. It is linear in one direction, more and more debt and easy credit regardless of the cycle.

    Now lets see if the Fed increases its FFR to the level of its own calculated inflation, or government goes back to deficits that are no more than the growth rate of GDP
    That is what is neutral,( being very liberal) and my vote is that that is never going to happen until it is forced upon them. Eventually stagflation. Just my opinion.

  6. #106

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    Quote Originally Posted by brutus2 View Post
    At the end of the day the whole objective of counter-cyclical policy is to offset the declines in demand through government spending. It is inflationary in the sense it supports aggregate demand, but it doe so at a time when aggregate demand is falling, thus you've got two countering forces at play which more or less offset each other with the hopes your counter-cyclical policy is scaled sufficiently large enough to offset the deflationary forces entirely. This, combined with the fact prior recessions were primarily addressed via monetary policy rather than fiscal, is why we haven't seen crazy inflation during or coming immediately out of any recession in recent US history.
    Counter- cyclical policy implies that when things are hot you do the opposite ( credit and deficit contraction) or when things are neutral you return to neutral policy
    This recession ( created in large part by government decree, not by market forces) had off the chart fiscal stimulus applied ( evidenced by massive deficit spending)
    and off the chart monetary accommodation ( evidenced by 0 interest rates and balance sheet expansion and incredible increase in M2)

    There is no counter cyclical in this 21st century. It is linear in one direction, more and more debt and easy credit regardless of the cycle.

    Now lets see if the Fed increases its FFR to the level of its own calculated inflation, or government goes back to deficits that are no more than the growth rate of GDP
    That is what is neutral,( being very liberal) and my vote is that that is never going to happen until it is forced upon them. Eventually stagflation. Just my opinion.
    We are going to have our currency revalued into USDollarCryptoCoin.... We will lose 20% haircut (if we're lucky) to "pay" for our government rancher overlords to shepherd us through this difficult time. After that, every sheet of toilet paper bought and used will be tallied as it is paid for by the new government cryptocoin.
    Last edited by t00nces2; 04-04-2021 at 05:04 PM.
    Now there's no more oak oppression
    They passed a noble law
    Now the trees are all kept equal
    By hatchet, axe and saw.

    I will not comply.

    The Tea Party... quietly plotting to take over the world,
    and leave you the hell alone!

  7. #107

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    Quote Originally Posted by t00nces2 View Post
    We are going to have our currency revalued into USDollarCryptoCoin.... We will lose 20% haircut (if we're lucky) to "pay" for our government rancher overlords to shepherd us through this difficult time. After that, every sheet of toilet paper bought and used will be tallied as it is paid for by the new government cryptocoin.
    I do not disagree with this. If it does happen, then the current crypto currencies will fall to their intrinsic value, which is 0.
    Gold will retain some value as it is useful, and most governments hold large amounts of it so they will not want its value to depreciate significantly.
    It also cannot be traced digitally, and can serve as value in stone age conditions or modern ones. It is also possible that it will appreciate significantly as the true historical hedge against fiat currencies.
    As far as the cryptos, why would one hold one that is not backed by the government. In fact they may simply say that any other one is counterfeit just like they do with non government backed fiat.

  8. #108

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    Quote Originally Posted by t00nces2 View Post
    We are going to have our currency revalued into USDollarCryptoCoin.... We will lose 20% haircut (if we're lucky) to "pay" for our government rancher overlords to shepherd us through this difficult time. After that, every sheet of toilet paper bought and used will be tallied as it is paid for by the new government cryptocoin.
    i think the reset will be a tenfold (100%) retraction where a current $100 will be then worth only $1. that way they can try to make us believe we are in better shape being the sheeple that we have become.

  9. #109

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    Quote Originally Posted by brutus2 View Post
    I do not disagree with this. If it does happen, then the current crypto currencies will fall to their intrinsic value, which is 0.
    Gold will retain some value as it is useful, and most governments hold large amounts of it so they will not want its value to depreciate significantly.
    It also cannot be traced digitally, and can serve as value in stone age conditions or modern ones. It is also possible that it will appreciate significantly as the true historical hedge against fiat currencies.
    As far as the cryptos, why would one hold one that is not backed by the government. In fact they may simply say that any other one is counterfeit just like they do with non government backed fiat.
    Of course that is what they would want to do. Some say they will not be able to succeed because the bitcoin blockchains and technology has grown beyond their ability to exert their control for expansive taxation and theft of more of our wealth. I do not know what to believe personally. The advent of government crypto coinage is inevitable though. That I do firmly believe will be sooner than later this decade.

  10. #110

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    Quote Originally Posted by Miteysquirrel View Post
    Sorry. I dont believe these numbers.

    A covid/democrat destroyed economy doesn't recover as soon as DT is out of the WH....if you believe it I have a bridge in Brooklyn to sell you.

    You would make a very good propaganda minister...your take on it is impressive.
    Old Joe Biden>>>> https://www.youtube.com/watch?v=vgTNfPw2nM4

    I Also Don't BUY it. Sorry.
    x3

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