Why do people think Inflation is so bad?

The majority of Americans can't afford it. That is my point. You and a tiny minority of Americans benefit while the rest of America suffers. Why should the rest of the population subsidize your wealth?

 

No, genius, I'm talking about the money that goes directly to the banks. The money they PROFIT from by lending and investing. That money could have just credited to mortgage-holders' accounts, instead, it just goes to the banks.

LOL!!!

"Limited ability"...LOL!!!

Yea, they're real "limited" in what they can do, unless, of course, you're a big bank, then they can do a lot for you...

 

No you are lying and being brainwashed by the news. The majority of Americans CAN afford it. They might complain about it, but they can afford it. Look at real data, don't listen to partisan news sources.

 

People don't want their own investments and assets to become worth less, but they do want other peoples' to become less valuable, especially if they plan to buy those investments and assets. Right?

Is there some way to keep inflation indexed to purchasing power?

 

Lol, the money the Fed gave to the banks was OUR money. The banks don't play with their own money, they play with money that represents our money. The Fed simply gave the banks our money back so that we can have access to it. The banks don't "profit" off these asset purchases like you think they do. The banking system is way to complex for you at this point.

Yea, they are the bankers bank... so if you are a big bank, the Fed can help you a lot. That's the point of the Fed. As for making policy changes that help the real economy, they are extremely limited in their ability.

 

Yes, the purchasers during deflation benefit. The asset holders do not. The question is when do the purchasers purchase the asset? If the asset was dropping in price, wouldn't you wait till it's cheaper?

As for inflation indexed to purchasing power. I have no clue how they would go about actually accomplishing that in the real economy. Our real purchasing power has actually increased over the inflation almost every year for the past 40 years.

 

OK - I'll grant that QE did not have the intended effect since banks didn't loan much of the money out, but how would you propose that the "one or two trillion" that you are asking for be introduced to the economy? Usually this would be accomplished through open market operations, but who would buy $2 trillion of US debt at such low interest rates and could the Fed argue credibly that it would buy that debt back before inflation kicked in?

 

DEFICIT SPENDING!! Stimulus. Congress passing an infrastructure bill that says here you go economy... here's a trillion dollars! Have fun!!

We have these things called Primary Dealers. They can purchase any amount of treasuries whenever we want. We will never run out of buyers for treasuries and the Primary Dealers will never run out of imaginary money to purchase the Treasury's. And if they do, then the Fed can just purchase them off them.

We literally have no limit to the amount we can spend and we literally have no way of ever running out of buyers of treasuries, since the money is created before the treasury is ever "bought".

 

The same argument applies to inflation. Who would want to buy or invest in things that have a lower return than inflation? One need offer a return that is worth more than the alternative, after factoring in the risk.

 

No one would... that's why you want things that have a higher return than inflation. And that is not the same argument as the effects of deflation.

 

So Congress says, "Sorry economy, we stole $1 trillion from your savings and investment so that you can go consume, after we take our cut, of course." Or do you mean to imply that money is wealth and Congress can create wealth simply by printing more money?

 

No Congress says "Send us your thank you letters economy, we just gave you $1 trillion more to save and invest!!"

 

Of course they profit off of it. The most obvious profit is still being in business when the market would have let them fail. Another way they profit is through the interest payments they receive on excess reserves. Yet another way they profit is by reaping underwriting fees through the issuance of Federal debt. Maybe the banking system is just too complex for you...

Must be nice to have your own special bank that will bail you out and foist the cost on poor people. Why can't regular Americans have their own "lender of last resort"? I guess the bankers are more deserving of it...

 

Creating money doesn't create wealth. It just spreads the existing wealth across more dollars, resulting in everyone's dollars being able to command less wealth. Inflation redistributes wealth.

 

The banks are our access to credit. If you let our access to credit fail, we fail. It's very simple. You can hate the banks all you want, and I agree they have special privileges, but letting them fail would cause disastrous consequences to our economy. It seems you want the economy to fail, so that they can institute your wild west strategy. I would hate to be a participant in your economy.

 

We aren't talking about effects of deflation, but why people would choose to invest or spend, rather than hold cash, in a deflationary period. It is for the same reason they would choose to do so under an inflationary period, that is, to make themselves better off.

 

The stimulus already failed. Stop believing in failed policies.

 

Oh, so then you are arguing that money is wealth and Congress can create virtually unlimited wealth through the printing press.

 

Yea, but the creation of goods and services does create wealth. And if more money can lead to more goods and services than creating money leads to more wealth. But you still are failing to see that there is MORE money. That means the people that can get this money can afford higher prices. The people that suffer are the ones that can not get any of this money. Why should I suffer because you can't make more money?

 

No, I'm arguing that money can facilitate the creation of wealth. Therefore Congress can directly or indirectly create transactions resulting in the creation of wealth. It's all pretty simple. Try going to the

 

No it didn't. You just made that up. Embarrassing Ethereal... I expect more out of you than just blanket statements with absolutely no proof to back it up.

 

That does make it sound like not so much of a problem.

The other thing, the rise and decline of the value of goods, that's pretty much the science behind investments, isn't it? Get it going big enough that probabilities become more important than specific instances, and you can make money over time by successfully harmonizing the waveform of your investments with the waveform of the rise and fall of the value of whatever you're investing in. Is that why some of the people invested in the stock market are always selling? It makes me think it's like a variety on a Ponzi scheme, where the whole point is to get enough people investing that, statistically, some of them are always doing the wrong thing so that other people can profit.

 

Leftist fantasies abound. Printing money doesn't fix long term systemic problems. Nor does finding a few more suckers to loan you money.

 

No it isn't. Why would people choose to hold on to money during an inflationary period? Even if they had to purchase something that gave returns less than inflation it is much better off than just holding on to it.

 

Try going to the ____?

Congress cannot get directly or indirectly do anything without first taking from someone. In order to spend, or direct the spending of, $1 trillion worth of wealth, it must take $1 trillion worth of wealth from those who produce it. It will come out of savings and investment and be spent on consumption. The destruction of wealth does not create wealth, nor can you possibly calculate that we are better off from the short term spending than we would be from the long term investment. Congress can make many people wealthy by stealing from some and giving it to those that they favor, but that is not creation of wealth, that is just redistribution.