New thread: 2022??

Discussion in 'Markets & Economies' started by mmm....shiney!, Jul 20, 2021.

  1. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Banks can run out of money, that’s why the government has the deposit guarantee and the RBA is the lender of last resort.
     
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  2. GOLD1

    GOLD1 Active Member

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  3. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    I'm kind of with him on most points, inflation is transitory, money printing does not lead to inflation (have a look at Japan) and in a liquidity crisis the flight to the USD will drive its value up and assets will be sold. I'm not with him on the credit thing because I think it's rooted a little deeper ie in wage stagnation (part of the RBA's plans to keep a portion of the population unemployed) and an absence of credit worthy individuals that banks are willing to lend to. In the end it leads to the same outcome - a credit crunch. We won't get hyperinflation.

    Deflationary period? Haven't we been in one for the past 50 years? Depression? I'm not convinced, yet.
     
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  4. Lovey80

    Lovey80 Well-Known Member

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    Germany, Argentina and Zimbabwe would beg to differ on the printing argument.
     
  5. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Something about trashed economies may be the difference.
     
    Last edited: Jul 29, 2021
  6. Lovey80

    Lovey80 Well-Known Member

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    Or the fact that at the time they did it, they were the only ones doing it to the extent they were? If MMT is correct then the extra cash should have stimulated demand to the point that the economies recovered no?

    The fact that 98% of the world right now is printing in unison with each other is the only reason currencies aren't tanking individually IMO. All seems relatively normal as there is no yardstick anymore to judge them against. If the whole world stopped doing it and any of the major economies kept it up, then surely the results would be the same? The US has a special status that shields it unlike every other currency but I don't believe it is perpetually immune.
     
  7. GOLD1

    GOLD1 Active Member

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    Lockdown to Christmas on the cards (AFR today)


    It is now more free cash to everyone. For businesses, it is upgraded from $10K to $100K.
     

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  8. dragafem

    dragafem Well-Known Member Silver Stacker

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    That is why I never argue with them when withdrawing.They always say "you have to call ahead for such and such amount". I just smile and say "I will do it next time" and walk away with I wanted:)
     
  9. Lovey80

    Lovey80 Well-Known Member

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    It's what everyone knows is going to be the case after those protests last week.
     
  10. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    @Lovey80, there are two pre-requisites before hyperinflation occurs. The first is a trashed economy ie demand exceeds the productive capacity of a nation. The second is that money printing chases the demand from consumers as a result of the trashed economy.

    Neither scenario is happening nor is going to happen in Australia. Or the US, or NZ or Japan..............

    It only happens in tinshit shithole places which have corrupt governments.
     
  11. hardyakkagold

    hardyakkagold Well-Known Member Silver Stacker

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    Last edited: Jul 29, 2021
  12. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    I'm pretty sure that most of what pops into your head is just fantasy.
     
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  13. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    I stopped reading when it became obvious that the author couldn't spell:

    Something about the link between low education and the range of cognitive, emotional and social outcomes springs to mind.
     
  14. precious roar

    precious roar Active Member

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    FFS, shiney, stop disrupting their conspiracy fantasies with logic!
     
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  15. Lovey80

    Lovey80 Well-Known Member

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    Why would demand need to exceed the productive capacity of a nation when they can import goods with their newly acquired currency? In a global economy with unfixed currency exchange rates, you can’t just print what ever you like. The printing will trash a perfectly good economy by itself if every other nation is being responsible with their monetary policy.
     
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  16. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Because they firstly can’t import enough goods to meet local demand because nobody wants their currency or they can’t buy whatever currency is in demand for trade or they’ve got nothing to trade reciprocally, and secondly their economy is trashed so they can’t produce anything no matter how much money is thrown at industry because their supply chains are fucked and they don’t have the resources required to produce stuff.

    That’s why hyperinflation happens in shit places like Zimbabwe, Venezuela or Lebanon yet doesn’t happen in NZ or Oz or the US.
     
  17. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    You mean like Japan?
     
  18. Lovey80

    Lovey80 Well-Known Member

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    no body wants their currency because they’re printing so much currency in the first place!
     
  19. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    You keep ignoring half of the equation - the trashed economy bit. No one wants currencies from trashed economies. Demand has nothing to do with the amount of currency being printed. Sure, it has a hyper inflationary effect, but only in shithole places with corrupt governments.

    The US economy is not trashed and foreign investors/CBs have continued to show faith in the USD and the domestic economy despite the huge increase in money being printed. Demand for USD may be subdued, it's at a 25 year low down from 71% of global FX reserves to 59%, but it is still being bought and it's still being held by governments around d the world. Get over the money printing bit, it's not going to cause hyper-inflation.
     
  20. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Jim Rickards:

     

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