- 25 Apr 2021 02:49
#15169000
The world has seen concurrent demand shocks and supply shocks.
When the pandemic is contained, there will be price changes. It will be impossible to say that they were caused by the increasing money supply or by the decreased supply of things to buy. Remember, a decreasing supply of essential stuff always leads to inflation even without more money in the economy.
People, when the Fed. buys back a bond the day after it was sold, it is as if, it was sold directlly to the Fed. So, Sue is right. Much or even most of the spending for covid over the last year by the US has been funded by 'selling' bonds to the Fed. which is just another arm of the Gov. This is certainly true, because 97% of its income (aka 'receipts') is paid into the US Treasury's account at the Fed. Note, not profiits, receipts.
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Unthinking Majority wrote:The US may not be able to default, but that doesn't mean there's such thing as a free lunch. Money is only worth what you can buy for it. Printing money doesn't create more "stuff" aka wealth.
The world has seen concurrent demand shocks and supply shocks.
When the pandemic is contained, there will be price changes. It will be impossible to say that they were caused by the increasing money supply or by the decreased supply of things to buy. Remember, a decreasing supply of essential stuff always leads to inflation even without more money in the economy.
People, when the Fed. buys back a bond the day after it was sold, it is as if, it was sold directlly to the Fed. So, Sue is right. Much or even most of the spending for covid over the last year by the US has been funded by 'selling' bonds to the Fed. which is just another arm of the Gov. This is certainly true, because 97% of its income (aka 'receipts') is paid into the US Treasury's account at the Fed. Note, not profiits, receipts.
.
Last edited by Steve_American on 25 Apr 2021 12:52, edited 1 time in total.