If you don’t see that our deflationary world is becoming an inflationary world, you’re just not paying attention.https://twitter.com/ewarren/status/1120296821300060160 …
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Correct. Financial asset inflation has no (direct) impact on wages/prices as there’s no consumption change. It’s sterilized (mostly) in market-world. Experiential non-asset inflation leads to dramatic consumption increase in real-world. See healthcare as example.
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Hmm. I see what you mean. Even if you sell financial assets somebody else is left holding it. Forgiving debt otoh is retiring an asset on the other end, so closer to either a sudden crash or a deficit hit for the state. A step-function decrease in asset base backing the currency.
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If houses and stocks go up in price, people and politicians clap
and economists argue there’s a wealth effect, a pass-through of wealth into the economy. If the price of bread goes up because people fight to get some bread to their stomachs and other basic goods... fucked -
However the truth is ... when the relative price of assets and basic goods continue to increase, it only benefits the wealthy. Under normal economic circumstances bread price shouldn’t go up, nor the price of houses was it not for the Fed benefiting only asset owners.
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