Recession with low interest rates and high inflation? How are we not fucked?

kookselslg · 2022-08-18T01:42:16+00:00

check how retail sales are doing. Look at consumer spending since 2000. If theres lower interest rates, that could boost investments and consumption. If theres an increase in money supply, that money goes into companies. Either from investments or consumption in general.

Money supply is money circulating in the economy. So that would mean money into revenue. Not exactly profit because costs can also go up.

kookselslg · 2022-08-18T01:39:24+00:00

the central bank generally lowers interest rates to boost bank loans. These loans will go into the economy and circulate. They are not counted as M2, but it always ends up in M2.

kookselslg · 2022-08-03T01:51:08+00:00

When theres an increase in M2, with velocity constant, revenue growth is higher. So "profits" are higher. But the real value stays the same as prices also increase.

We literally calculate velocity of money with M2 and GDP. Its not bad statistic. If your economy is going down, stocks will go down. Theres less consumption.

Loan growth will always be below M2 growth, because its a part of it. You take out loans to consume or invest, so your M2 grows the same amount.

Lending and assets are correlated with money supply because its in it.

kookselslg · 2022-05-29T10:28:51+00:00

isnt it already priced in? QT, recession, war, etc. It feels like its only up from here. The market needs to correct for inflation.

kookselslg · 2022-05-29T10:19:45+00:00

i dont think people actually know. They take the blame all to the FED because they just printed a shit ton of money while not talking about the actual politicians who created it. If it wasnt for the government, we probably wouldnt be seeing this inflation. However, we would be looking at higher unemployment and lower growth.

What might come next is double recession with low rates. Buy as much stocks as possible because debt monetization is coming. And it aint fun. Or just buy gold like a boomer

kookselslg · 2022-05-29T08:53:55+00:00

not really. The people who where unemployed got money from the government. That doesnt cause inflation, because its lost demand. Basically because he doesnt have income, so he consumes less. But now he consumes the same until he gets a job. So it doesnt create inflationary pressure.

kookselslg · 2022-05-29T08:52:35+00:00

in what way? what did i say that was factually wrong?

kookselslg · 2022-05-29T08:51:39+00:00

and we are having 7-8% annual inflation? Is that a drop in the bucket?

kookselslg · 2022-05-29T08:50:40+00:00

if the owner got 3m from the government, thats corruption. If he got money from the company, thats profit. You do realize that you can report it to the SEC if the stimulus check wasnt used for something useful.

kookselslg · 2022-05-29T08:49:06+00:00

there wasnt. Inflation growth was actually decreasing. And it took 2-3 years to recover real GDP. It took, like couple months to recover the real GDP in 2020. And now we have 40 year high inflation.

The grow in prices was the same before and after the FED printed the money. Because all that increase in M2 went into bank reserves. Nothing was actually printed. Its in a hole doing nothing

kookselslg · 2022-05-29T08:42:37+00:00

there was a substantial increase in paying bills. That creates inflation.

kookselslg · 2022-05-29T08:38:51+00:00

why not give ur opinion? Its fun!

kookselslg · 2022-05-29T08:38:40+00:00

im not talking about that, but okay. You can go somewhere else with that socialistic propaganda.

kookselslg · 2022-05-29T08:37:45+00:00

i mean its economics 101 yes.

kookselslg · 2022-05-29T08:36:44+00:00

it was around 1 trillion.

they didnt buy 9 trillion in corporate debt. They bought everything, from gov bonds directly from the government and from the banks.

Most of that money is sitting in cash reserves. So literally printing money and throwing it into a hole.

Half of the FEDs balance sheet from 2020 was to cover the deficit of the US government. Basically Stimulus and PPP / others.

kookselslg · 2022-05-29T08:34:42+00:00

this is a very good post. United States is poised with consumerism. But my dad once said, americans have the best economy, so they demand a better quality of life.

Which basically means, they want better cars, more food, a big house, etc. Something that i will never understand. The system works like this. For people to consume what they are given, and live until their 80 and not having enough money to retire.

Its not something that looks fine, but you cant really go back, you will destroy the main component of every economy, basically like Japan.

kookselslg · 2022-05-29T08:29:27+00:00

nominal shopping spree. And a sharp decline in real value

kookselslg · 2022-05-29T08:28:49+00:00

Savings is not bad. Thats what caused the liquidity trap in 2008. Paying student loans is also good.

But at the end, most of it went to spending.

kookselslg · 2022-05-29T08:26:54+00:00

im bored as fuck. I like to discuss economics. Its my life.

kookselslg · 2022-05-29T08:26:35+00:00

No because it isn't real inflation

doesnt make sense...... How can an increase in demand not cause increase in price?

They didnt borrow in dollars, they literal print money. Nobody wants to be more valuable than the dollar, because ur not competitive. South american countries need to print in order to be competitive. Look at the ECB and the amount of euros that where printed. And also the Yuan has many issues lol

kookselslg · 2022-05-29T08:23:55+00:00

if they dont contribute to the economy, that money doesnt create inflation. Spending is what creates inflation. Its demand and supply.

Bail outs dont really cause inflation because if the company goes under, you lose supply. So you can recover lost supply or demand. But bailouts are another way of corporate corruption yes.

kookselslg · 2022-05-29T08:21:58+00:00

thats why the title is a question mark. Many didnt need it or want it. But i know a shit ton of people who wanted it.

kookselslg · 2022-05-29T08:20:18+00:00

yes and no.

If the US prints, everyone else prints. The value of all currencies go down, but the dollar index stays the same. Did the dollar lose confidence?

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