RE: A Request for Taskmaster:

You and @taskmaster4450 are super great at explaining all these financial topics. I only listen to daily news and definitely always hearing conflicting reasons as to why things happen the way they do. Much appreciate you guys insights and learning as I read both your insights.

On the topic of money printing I agree it’s not helping the majority but the money is being created. In this money system there are two kinds of money. There is base money where it’s only interchanged between banks and broad money where it’s used by everyday people in the real economy.

The issue lies in the money printing is going into base money which banks control. Broad money works in the real economy but central banks are not allow to give it directly to people. Government need to push fiscal policies to get broad money into the real economy. This happened during the pandemic.

During lockdown government made fiscal policies that push cash to people such as tax credits and loan moratorium. The results of this now is what we see now, real inflation. Supply of goods and services never increased due to shutdown but people had cash to spend. Savings rates in the USA were at highs during pandemic but now with everything opening everyone is spending what they saved which pushes prices higher and higher prices.

The Fed has to main objectives. Control prices of assets and minimize unemployment. With real inflation seeming out of control the Fed is raising rates but not raise too high to increase unemployment. They are trapped in that if inflation can’t be contained they will continue to tighten money supply with monetary policies like raising rates and selling assets on their balance sheet.

While globally there is a shortage of dollar due to their own greed by inflating their own asset prices. Outside USA other central banks created their own US dollars for holding up asset prices. These US dollars are known as Eurodollars. Fed had stated they don’t care what how many Eurodollar ther is and it’s other countries problem to keep of track if and when issues arise. Issues are arising where people are withdrawing US dollars to pay for loans or buy assets. Foreign banks are in trouble because they don’t have enough US dollars for people to withdraw because it’s mostly Euro dollars. So foreign countries holding a lot of US treasuries are selling to get dollars. The Fed don’t want other countries to lose value on the US treasury sales since rates have been rising so Fed made up new policies to buy foreign owned US treasuries at face value. This will starve a domino effect of deflation for now since there are trillions of US treasury outside of the US.

In the last piece regarding government debt it is a shift that is continuing on a daily basis with the end result likely hyperinflation in the US economy. Back in 2008 the financial crisis was bubble popping on public debt. Now it’s debt on commercial entities. For examples overpriced commercial real estate and high company evaluations free falling. It will end up being debt on government once economy slows and too many people lose their jobs. The government will end up voting for a economic bailout. The debt can’t be sold at reasonable prices because foreign countries are selling US treasuries to fend of what they printed in Euro dollars. This is what people call the everything bubble popping.

The everything bubble popping is a slow and steady process but end result is a lot of US dollars in the form of bailouts and foreigners unwilling to hold US dollars. It’s going to take decades if not a century to play out but at the end there is too much US dollars chasing fewer and fewer goods and services. Hyperinflation or stagflation where prices go up but income stagnant.

This is just my interpretation from all the Econ stuff i read. Apologies in advance for any misinformation. !LOL

Again appreciate the post as it’s really interesting stuff being discussed.