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Inflation
Inflation
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Christopher Moir
Maker of random charts that seem important 2 years later

I know this is UK GDP you can find others.

The reason it is deflationary is that it is not enough. It never has been. The balance sheet construction that was built on the myth of MBS and all the other ancillary bonds has disappeared. The expansion that was thought to have happened was lost the minute those bonds failed to be priced anywhere near the previous prices. QE(insert country or number) did not work. We have been in a silent depression. The MBS shenanigans simply covered over the cracks of the first of the boomers to start retiring. The single largest cohort of humans not only in the US but in the whole of western society is leaving the workforce and "downsizing" as they should. All at the same time.

There is no cohort large enough to fill their demand gap. The next largest behind them can have a camera/telephone/secretary/television/hifi/.../etc all in the palm of their hand. If this person wants to start a business many of the services involve very few people many of whom are spread across the planet.

It always worried me over the summer when people were calling for a "V-shape" recovery "fuck please no don't let it only be v shape!". Because the GDP after 2008 was V shape and the problem is the right stick doesn't reach back to trend. We need a "tick" shape recovery, else we end up like the chart above. With less output.

EDIT:

"tick" or "check" mark, one... (More)

I am more on the van Metre and Jeff Snider deflationary side of this. If government spending and QE was inflationary then Japan should be experiencing hyperinflation. The US and Europe have been embarking on increasing measures of QE since 2008 yet inflation is going nowhere and the currencies are stronger, or within trading ranges.

The way I look at it is that both QE and government spending have the same result of sucking money out of the private (i.e. productive) economy, which slows real economic growth. With less wealth there is going to be less demand, and therefore less inflation. The irony is that the more debts developed nations issue the more demand there is for it, which then crowds out other productive investments. Just look at how demand for treasury auctions just keeps growing to meet whatever the issuance increase is. QE further incentivizes demand for bonds by basically putting a floor on prices.

Sure, QE can create temporary asset bubbles in some places where the governments are spending money but on balance it is sucking money out of the productive economy leading to a net decline in overall economic activity.

From what I can tell, Lyn Alden's view differs from van Metre's in that she feels governments will ultimately change the rules that have so far prevented QE and government stimulus from causing inflation when they see it continues not to work. Lyn believes that the Federal reserve act will be changed (and relevant laws in other... (More)

Can Transition to DeFi finally create inflation?

So interesting times with the promise of DeFi and stable coins.  This space seems to have very high velocity of money and high interest rates.  If more and more of the financial system transitions to this, I expect the limitations due to banks being giant black holes for money supply may start to change and finally lead to inflation (even the good productive kind) and increase credit creation for individuals and entrepreneurs.  Might be the "vaccine" miracle the central banks need in this horrible stale mate they are approaching.  

LIVE at 11am EST: Steven Van Metre & Michael Ashton - Ask Me Anything

Steven Van Metre of Steven Van Metre Financial is back with Michael Ashton, founder of Enduring Investments, to go further in-depth on and answer audience questions about inflation. Van Metre and Ashton review what they’ve previously discussed and clarify their thoughts on the impact of inflation on gold, wages, and wealth disparity. They also tackle money velocity and interest rates, the penalty incurred for holding cash, the differences between global inflation and national inflation, and more.

CLICK HERE TO WATCH LIVE STARTING at 11:00am EST