Quote:
Originally Posted by jyl
To be selfish and short term about it, I figure: excess liquidity has its largest and fastest effect on financial asset inflation (because you can buy and sell it at the click of a mouse, and greed/mania color most players’ view of the price) and less effect on goods inflation (it gets hard to store pallets of plywood or TVs, and no-one is stupid enough to think they’re gonna get rich filling their garage with either), with real estate inflation somewhere in the middle. So, suppose the BFT get their hands slip off the controls and liquidity goes nuts. Seems to me that financial asset prices will go up faster and by a lot more, before goods prices react and eventually filter through to inflation measures and expectations and force BFT to reach for the punch bowl aka brakes. Which means, you make money :-) before things start turning dour :-/ and you have to go defensive :-(
Isn’t that how market and economic cycles work in the modern economy? Wall St makes lots of money, eventually Main St starts making some money, and that’s about when the reset button gets pressed, and the smart part of Wall St is on the sidelines, the dumb part of Wall St loses money, and Main St loses job/house. Rachet this over and over, and no wonder the rich get richer and the rest maybe just hold on - and why the good investors have staying power through multiple cycles and the bad ones get blown out of the game.
The Redditt and Robinhood kids haven’t experienced a cycle yet. It will be fun when they do.
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Through thick and thin the USD has for 230 years always been there steady as the Rock of Gibraltar.. It is the UNIVERSAL CURRENCY that is the foundation for all business and finance in the world. NO BODY KNOWS ANYTHING DIFFERENT...
Now since 09 the FED has been monetizing debt with the USD...they have DEBASED THE USD...for short term expediency. They have about exhausted it's good will faith and or any intrinsic value that it has.
When that ESSENTIAL CURRENCY's value EVAPORATES...a VACUUM is formed which implodes the Global Economy of Scale...that implosion will have the same effect as a Nuclear War without bombs.. There will be no Global Economy of Scale, it will cease to exist..and with it goes the modern lifestyle..