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SBF
@SBF_FTX
Replying to
@SBF_FTX
39) And so some of what’s happened over the last decade–and especially over the last few years–is that bad things happened (e.g. COVID) but markets went up instead of down, because we increased monetary supply.
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SBF
@SBF_FTX
40) And, I guess, it ‘tricked’ some of us into thinking that things were going great, because “number go up”, when really that $440 SPY buys about as much stuff today as $330 SPY bought a few years ago.
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SBF
@SBF_FTX
41) So what does all of this imply for the future? Well, on the one hand, inflation–true inflation–is high. Really high. High enough that it would generally be worrying. Does that mean markets will keep going up? Especially given that even CPI inflation is now high?
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SBF
@SBF_FTX
42) Maybe. But maybe not. Because to some extent, that should already be priced in to “efficient” markets. As soon as the world realized what was going to happen to policy because of COVID, prices should have adjusted to the full increase that all future QE would bring.
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SBF
@SBF_FTX
43) CPI increasing this year doesn’t make markets go up more: markets already knew that the monetary supply had increased, and didn’t have to wait for CPI to move.
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SBF
@SBF_FTX
44) Instead, CPI increasing this year had the effect of increasing political pressure to reduce inflation by tightening monetary policy. So increased inflation indicators sometimes lead to decreased inflation, because of policy reactions.
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SBF
@SBF_FTX
45) So I don’t know what this means going forward. On the one hand, there are real signs of tightening policy for the first time in a while. On the other hand, even the proposed rate hikes are a lot less than true inflation probably is, barely making a dent in real rates.
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SBF
@SBF_FTX
46) And also, there’s a war going on now, on top of COVID; there will be pressure to prevent markets from crashing, which means, well, you know…
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SBF
@SBF_FTX
47) So in the end–I don’t know what will happen going forward. I wish I were smart enough to see the future, rather than just the past. But I guess my main takeaways from MMT are: a) It probably lead to significant, serious inflation b) Also it probably prevented a recession
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SBF
@SBF_FTX
48) Those are, sometimes, two sides of the same coin. And, also: c) QE → number go up → easy to get financing → number go up → easy to get financing → …
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SBF
@SBF_FTX
Replying to
@SBF_FTX
50) Thus, BTC. And oil, and nickel, and SPY, and houses, and art, and bonds, and VC fund sizes, and private markets, and pretty much everything marked to market.
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macmar
@sks01119
Replying to
@SBF_FTX
If "money printing" has the effects you explain, how come for 15 years Japanese inflation didn't rise. Equities effectively flat, JPY broadly stable. More helpful to understand that CBs don't create money, private banks do Money is endogenous to credit.
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Ahrkane
@BapuCookie
Replying to
@SBF_FTX
mean less becouse all you say is just machinary etics going negative remplace human by robots and dignity by slavery systems. but bullet economy and valcanisation economy you may dint calculate. for the good of usa the nuclear button should be stolen or ransomware.
WEY
@weys7s
Replying to
@SBF_FTX
"accidentally" :'D. A system designed so that numbers mostly just go up for who? and mean less and less for who? Who is funding this system? Poor hardworkers?
chumblepie
@chumble_pie
Replying to
@SBF_FTX
Do you worry this will lead to growing wealth inequality because those with capital see their assets increase inline with *real inflation and those without can’t afford to buy houses etc at these marked up prices?
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