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2022-05-26 Economy
The Bond Market and Inflation-Peter Zeihan
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Posted by DarthVader 2022-05-26 08:17|| E-Mail|| Front Page|| [235 views ]  Top

#1 Whew! Image width set to 350, so it’s no longer blowing up the Burg.
Posted by trailing wife 2022-05-26 08:41||   2022-05-26 08:41|| Front Page Top

#2 Oh, dear. This is a poke in the eye to the "death of the dollar" crowd.
Posted by M. Murcek 2022-05-26 08:51||   2022-05-26 08:51|| Front Page Top

#3 Thanks TW. Normally Rantburg images play nice. Not this one!
Posted by DarthVader 2022-05-26 10:41||   2022-05-26 10:41|| Front Page Top

#4 1. Quit giving the banker basically zero interest loans from the Fed.
2. Tell the bankers go to the people and invite them to put money in saving paying more than 0.02% interest. If anyone is old enough to remember before the Treasury was issuing money at zero rate to 'prime' lenders, rates that make a reasonable return on investment.
3. Tell the home buyers to have 10% down on what they want to buy which means they're not going to have all those HGTV bells and whistles.
Posted by Procopius2k 2022-05-26 13:22||   2022-05-26 13:22|| Front Page Top

#5 If you want to put your money on autopilot, an EFT at Vanguard or similar will do that with better results than any savings account can.
Posted by M. Murcek 2022-05-26 13:24||   2022-05-26 13:24|| Front Page Top

#6 The Fed has a balance sheet of $9 trillion. Which means that over the last 10 or so years it has just dumped $9 trillion into the economy without producing anything at all. This is the classic recipe for inflation--"too much money chasing too few goods" They say they are going to begin unwinding the balance sheet to the tune of around $80 billion/month. Which will be a good start. We'll see how long they can stay the course before political panic overcomes any semblance of a sound monetary policy.
Posted by Tom 2022-05-26 13:45||   2022-05-26 13:45|| Front Page Top

#7 The "goods" are suckier all the time. Debased dollars chasing them seems right somehow.
Posted by M. Murcek 2022-05-26 13:50||   2022-05-26 13:50|| Front Page Top

#8 Here's a game to play. Go here and enter your best recall on commodities when you used to pay with silver coins. Like I used to pay 35cents a gallon of gas or McD's were 45cents for a hamburger, fries, and a drink (all small). The point appears that commodities generally stay relative to each other over the years less any major technological or resource discoveries. It's the fictitious 'value' of command currency that balloons. Governments run by men can't help themselves but to inflate/debase the coin.
Posted by Procopius2k 2022-05-26 15:29||   2022-05-26 15:29|| Front Page Top

#9 A "commodity" is something you have to dig out of the ground, drill for, or grow. All cost money to liberate, refine, produce. Inflation makes them more costly to instantiate and more costly to buy.
Posted by M. Murcek 2022-05-26 15:34||   2022-05-26 15:34|| Front Page Top

#10 ^ Before someone screeches, yes breeding, raising, feeding and slaughtering cattle is a commodity operation too.
Posted by M. Murcek 2022-05-26 15:36||   2022-05-26 15:36|| Front Page Top

#11 But this inflation is arguably a demand (or shortage) inflation.

The Fed's balance sheet has been rising for years and years, and we hardly had inflation.

Inflation will get moving once the velocity of money (M2) increases, and that's actually been decreasing over the years.
Posted by DooDahMan 2022-05-26 19:38||   2022-05-26 19:38|| Front Page Top

#12 Before someone screeches, yes breeding, raising, feeding and slaughtering cattle is a commodity operation too.

I for one support a beef based currency.
Posted by DarthVader 2022-05-26 20:45||   2022-05-26 20:45|| Front Page Top

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