Reply to: BoE money printers are on fire

[BR14]

A nice area? in Yorkshire?

[_V_]

that is more due to lack of supply we are 2M + dwellings short after population growth. In Yorkshire you can get a 3 bed for £50K.

In a nice area? Damn, why am I still living here down south!

[vetran]

Yep. People who say "where's the inflation then?" I say, go buy a nice 5 bed detached family home in the SE with your current pay and tell me there's been no inflation.

that is more due to lack of supply we are 2M + dwellings short after population growth. In Yorkshire you can get a 3 bed for £50K.

[_V_]

money printing is going on since 2008
but it seems inflation is limited to stocks, gold, property value only as they have skyrocketed since then.
there is no inflation in consumer goods or commodities as yet.

Yep. People who say "where's the inflation then?" I say, go buy a nice 5 bed detached family home in the SE with your current pay and tell me there's been no inflation.

[Andy2]

I'm dead serious, can someone explain why all this printing or borrowing isn't causing inflation to go up, interest rates to go up and generally causing all sort of, well you know, bad stuff which is supposed to happen when you just make money out of thin air?

On the other hand, if all this magic making actually isn't so bad, why the hell has no one done it before to solve issues like poverty, homelessness, pumping money into pretty much every area that needs money etc.?

money printing is going on since 2008
but it seems inflation is limited to stocks, gold, property value only as they have skyrocketed since then.
there is no inflation in consumer goods or commodities as yet.

[scooterscot]

I'm dead serious, can someone explain why all this printing or borrowing isn't causing inflation to go up, interest rates to go up and generally causing all sort of, well you know, bad stuff which is supposed to happen when you just make money out of thin air?

On the other hand, if all this magic making actually isn't so bad, why the hell has no one done it before to solve issues like poverty, homelessness, pumping money into pretty much every area that needs money etc.?

Because the money did not exist in the first place. Can I answer this in bullet points?... I'll try.

1) For years and years banks gave out loans.

2) Those loans were for mortgages, cars etc. You need a loan? No problem says the bank. The money is in your account.

3) That money is just a number of a screen. The bank created money (whilst the central bank did not).

4) Wait, what did you just say? The bank said this number on the screen is now yours to buy the house/car but no actual money existed to back it up. No value was created / added - hence no inflation.

5) Retail banks are creators of the money supply. That was the duty of central banks. Now central have no place in the world and are dying.

5) But we're creating money now, so why no inflation? Because central banks are now trying to print enough money that was created out of thin air by retail banks. The 'actual supply of money' is less than the 'digital supply'. In fact the derivatives market is worth many multiples of the FED balance sheet. North of $200 trillion!


To answer your question. Why no inflation? Why is gold not rocketing up? Gold has actually increased 10x over the last 20 years and *real money* about 7x, yes even after all the printing to date.

Inflation is not coming... deflation is. And it'll be huge. There's reports from around the world of warehouses full to bursting with goods, India with far too much sugar production, oil no one is using, we have a massive oversupply problem at the moment. Now those suppliers will lower prices to get a sale. And people will think, oh it is cheaper this month, I'll wait until next month for it to be cheaper still thereby making a bad problem worse.

This will continue until deflation hits a peak and that oversupply is used it up. The inflation can start again. Buy gold at that point, but not before.


Professor Richard Werner provides an excellent description of the current flaws in the UK banking system:

[NowPermOutsideUK]

I'm dead serious, can someone explain why all this printing or borrowing isn't causing inflation to go up, interest rates to go up and generally causing all sort of, well you know, bad stuff which is supposed to happen when you just make money out of thin air?

On the other hand, if all this magic making actually isn't so bad, why the hell has no one done it before to solve issues like poverty, homelessness, pumping money into pretty much every area that needs money etc.?

It has caused inflation in stocks and houses. Fortunately those are mot included in the Uk inflation measure. I am serious here

The pound is down massively against eur and usd but that’s be the case for a while now. If you expecting food or diesel to fall in price that won’t happen but if this had not been tried then deflation would have happened because too much consumption took place in 2007

[dsc]

I'm dead serious, can someone explain why all this printing or borrowing isn't causing inflation to go up, interest rates to go up and generally causing all sort of, well you know, bad stuff which is supposed to happen when you just make money out of thin air?

On the other hand, if all this magic making actually isn't so bad, why the hell has no one done it before to solve issues like poverty, homelessness, pumping money into pretty much every area that needs money etc.?

[hugebrain]

cos BTC has got more expensive.

Your GBP is pretty much the same against all other FIAT currencies (USD, EUR, CHF etc). So it's worth the same as it was.

Is that like when you go over a waterfall, you're not really falling since you stay the same level as the water around you?

[Andy2]

With all this printing an average house in UK will cost a million quid in a few years
zimbabwe on thames , here we come.

[AtW]

I am not a tulipcoin fan but Bitcoin has stayed relevant because it is priced in dollars and a lot of people in a lot of countries facing high inflation have hedged themselves by buying bitcoin. In countries like Argentina you cannot just buy dollars, so bitcoin has proved to be an easy alternative.

It was possible to buy dollars even in Soviet Union

[Lance]

you really think that highlighting one part of my sentence to prove your point is a reasonable position. You missed the bi I've highlighted


"The bitcoin speculative bubble is isolated from that to some degree by the fact that it's not a currency that can be used in normal day to day transactions due to the astronomical charges."

when it costs over 30$ (or whatever it is now) for a single transaction you can't use it to buy a coffee, a meal, a pint. Hence it's not a currency that can be used.

[darmstadt]

cash is only worth anything relative to something else.
When inflation is low/stagnant, printing money makes more money but doesn't actually devalue it against real goods. So it's not lost as much value as has been printed.

The bitcoin speculative bubble is isolated from that to some degree by the fact that it's not a currency that can be used in normal day to day transactions due to the astronomical charges.

Although you have to admit, Bitcoin is good for paying for porn and drugs so presumably these are day to day transactions for people who believe in Bitcoin

[scooterscot]

when BTC was in its infancy the Argentinian peso was used as an example of why BTC could work.
BTC is volatile. But less volatile than the peso was at the time.

Indeed this is true. And is becoming less and less volatile as we go on.

Where are the gains going forward do you think?

[vwdan]

[Scooter being a moron]

Yeah, if you skip half the words in a sentence you probably won't be able to understand it properly. Combined with a suboptimal ability to read and absorb information I imagine you're going to have problems.