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Economy => Economics => Topic started by: Hydrogen on October 16, 2020, 10:11:10 AM



Title: Money Supply Growth Has Never Been As High As It Is Today
Post by: Hydrogen on October 16, 2020, 10:11:10 AM
Quote
With the Federal Reserve and Congress pushing stimulus efforts to new heights, some investors are keeping a close eye on a surge in the U.S. money supply for signs of inflation’s long-awaited return.
We have never observed money supply growth as high as it is today
With a litany of metrics showing rapid growth in the value of money waiting in banks and other liquid accounts, investors from Ray Dalio to Paul Tudor Jones have warned that the era of tepid price rises may be coming to an end.

“It’s fair to say we have never observed money supply growth as high as it is today,” Morgan Stanley chief U.S. equity strategist Mike Wilson wrote this week.

The “Fed may not be in control of Money Supply growth which means they won’t have control of inflation either, if it gets going,” he added.

https://i.imgur.com/abdE2wb.png

There are several different ways economists measure the size of the U.S. money supply that are generally classified with the letter “M,” such as M0, M1 and M2.

The broad M2 measure includes cash, checking deposits, savings deposits and money market securities. Because of its wide definition, economists and investors tend to watch changes to the M2 supply as an indicator of the total money supply and future inflation.

More money, more inflation?

As underscored by Wilson, the year-over-year percent change in the M2 supply is now north of 23%. To put that in perspective, year-over-year growth in the M2 money supply had never exceeded 15% until 2020, according to Fed records dating back to 1981.

Normally characterized by slow, steady growth, the M2 supply has grown 20% from $15.33 trillion at the end of 2019 to $18.3 trillion at the end of July.

“The risk of higher inflation may be greater than it’s ever been, too,” Wilson wrote. “While this hasn’t shown up in back end rates yet, the very sharp move higher in breakevens [bond market inflation expectations] and precious metals suggest higher inflation may be on its way.”

That seemed to be the opinion of longtime hedge fund manager Paul Tudor Jones, who in May said that his concerns over inflation and dollar depreciation prompted him to invest in both bitcoin and gold.

https://i.imgur.com/Lqasn4D.png

Though the differences between bitcoin and gold are many, Wall Street has for weeks chased both assets as hedges against inflation and a relatively safe place to keep wealth during a volatile year.


Gold, one of 2020′s best trades, on Wednesday burst through historic resistance at $2,000 an ounce to reach a new record. Between the Covid-19 pandemic and inflation expectations, gold has gained nearly 35% this year, far ahead of the S&P 500′s 3%.

“If you take cash, on the other hand, and you think about it from a purchasing power standpoint, if you own cash in the world today, you know your central bank has an avowed goal of depreciating its value 2% per year,” Jones said in May. “So you have, in essence, a wasting asset in your hands.”

https://i.imgur.com/kPspC2t.png

The source of this M2 expansion and these inflation concerns isn’t necessarily a mystery.

Congress and the Fed have worked in tandem to combat the negative economic effects of Covid-19 with an unprecedented cocktail of fiscal spending, near-zero interest rates and subsidized loan programs.

Those efforts, largely designed to help businesses keep workers on payrolls and ease the impact of layoffs, have been applauded for keeping consumer spending afloat in recent months.

But between a prodigal Congress and an empowered Fed, critics argue that “printing money” to juice the economy could backfire and cause a spike in prices. Banks are still stuffed to the gills with reserves that could, in time, flow into the economy through credit and loans.

“Congress is now the critical player in driving money supply growth with the Fed fully committed to doing whatever it takes,” Wilson wrote. “This is very different from the post [financial crisis] era when aggressive monetary policy was unmet with a willing borrower and spender. We think this poses a greater likelihood for inflationary pressures to build.”

Need for speed

But while an expanded money supply may set the stage for inflation, the relationship between M2 and inflation has been debatable over the years. Some, like PGIM Fixed Income economist Nathan Sheets, said he’s taking a wait-and-see approach.

Sheets, who served in the U.S. Treasury Department until 2017, said investors were also worried about inflation in the aftermath of the financial crisis. Those fears, he said, ultimately did not come to fruition.

“Rates were very low and central bank balance sheets (and money creation) had surged. But the liquidity then sat in the banking system—including as excess reserves at the Fed,” he wrote in an email. “Money creation must translate into increased lending and spending in order for it to be inflationary.”

The idea that money creation won’t necessarily generate inflation is centered on yet another economics concept known as the velocity of money.

The velocity of money is, very simply, the rate at which money is exchanged in an economy. High money velocity is usually associated with a healthy economy with businesses and consumers spending money and adding to a country’s gross domestic product.

But the velocity of money can slow during recessions as corporations and families elect to save more of each dollar they earn. Demographic changes, such as an older population, also tend to curb the velocity of money.

According to Sheets, the Fed can go to extreme lengths to flush the economy with cash and bolster the M2 supply. But if businesses and customers aren’t inclined to spend the added dollars, the cash will almost invariably wind up sitting idle, not contributing to GDP or inflation.

That may be a partial explanation as to why the U.S. hasn’t seen headline inflation numbers increase despite the rise in M2 supply in recent months.

The Labor Department’s latest report on core consumer prices showed the index down for a third consecutive month in June for the first time since 1957. The core personal consumption expenditures price index, the Fed’s preferred inflation gauge, increase 0.9% on a year-over-year basis in June, the smallest advance since December 2010.

“Inflation has been held down by some deep structural factors, including aging demographics and high debt levels — which have restrained aggregate demand and pressures on prices,” Sheets wrote in an email. “Workers have struggled to get higher wages, and firms — competing against the so-called ‘Amazon price’ — have had little capacity to raise their prices.”

“My expectation is that these forces are likely to continue on the other side of the virus,” Sheets wrote. “In response, central banks will remain highly stimulative, but hitting 2% inflation targets on a sustained basis is going to be a challenge.”

https://www.cnbc.com/2020/08/05/the-ballooning-money-supply-may-be-the-key-to-unlocking-inflation-in-the-us.html


....


Bitcoin was mentioned positively in this article as a legitimate hedge against inflation similar to gold (bolded).

Summary

  • the year-over-year percent change in the M2 supply is now north of 23%. To put that in perspective, year-over-year growth in the M2 money supply had never exceeded 15% until 2020, according to Fed records dating back to 1981.
  • Normally characterized by slow, steady growth, the M2 supply has grown 20% from $15.33 trillion at the end of 2019 to $18.3 trillion at the end of July.
  • The “Fed may not be in control of Money Supply growth which means they won’t have control of inflation either, if it gets going,” Morgan Stanley writes.
  • Economist and former Treasury official Nathan Sheets counters that if businesses aren’t inclined to spend, the larger money supply may do little to fan inflation.

The following point is very interesting:

Quote
“Rates were very low and central bank balance sheets (and money creation) had surged. But the liquidity then sat in the banking system—including as excess reserves at the Fed,” he wrote in an email. “Money creation must translate into increased lending and spending in order for it to be inflationary.”

The mainstream media acknowledges the US monetary supply is growing at its fastest rate since the 1980s. Inflation is becoming a legitimate concern. Savvy investors are putting their money in gold and bitcoin in an effort to avoid having their wealth be devalued.

This scenario is one that has been mentioned and discussed on this forum countless times over the years. I wonder what people think of this.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: fiulpro on October 16, 2020, 10:26:03 AM
Yes this is one of our most dire concerns. The huge money supply needs a strong back support , the country must be able to tolerate it , but unfortunately due to the pandemic I don't believe that they can keep this up for long.

The Inflation is bound to affect not only the people but the country as a whole , but I do believe it's going to be worse for the nations who rely on import, even of basic things like flour and vegetables.

Quote
The countries that are heavily relying on imports food are Mexico, Japan, S-Korea, Egypt. With the exception of China, the proportion of the globally imported food for most other countries is relatively small (usually less than 20%)..
{Taken from google}

So these countries will be worst hit eventually.

The zero interest rates aren't helping actually, people are taking loans more and eventually they would have to pay off somehow, it might stimulate economic activity for a while but unfortunately right now every country is at a peak.

We need more job creation.
More production of foods and other resources in the countries themselves.
Better and cheaper healthcare facilities right now.
Free distribution of masks and gloves , because I have seen shops selling masks for 0.5$ -1$ , unaware that this would just cause more problems.

We need to go though this pandemic without loosing the value of the printed money.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: Broly46 on October 16, 2020, 11:10:19 AM
If I ever understand as little as 1% of what they’re talking about, I think they’re telling people to keep spending money, keep borrowing more money, keep taking more loan, and that will fix the inflation miraculously.

Quote
Economist and former Treasury official Nathan Sheets counters that if businesses aren’t inclined to spend, the larger money supply may do little to fan inflation.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: bitmover on October 16, 2020, 12:30:23 PM
Ar the same time bitcoin just halved.

This is why it is calling so much attention now, and its price is higher than normal


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: rollingdice on October 16, 2020, 12:34:15 PM
History never repeats itself, but it rhymes. Debt-based money and unpayable debt as a result had leaded to the crisis ones.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: Upgrade00 on October 16, 2020, 04:05:33 PM
If I ever understand as little as 1% of what they’re talking about, I think they’re telling people to keep spending money, keep borrowing more money, keep taking more loan, and that will fix the inflation miraculously.

Quote
Economist and former Treasury official Nathan Sheets counters that if businesses aren’t inclined to spend, the larger money supply may do little to fan inflation.

That quote was a description of the relationship between fiscal policies, GDP growth and inflation. During a recession, just as this one, banks adopt policies to cushion the effect and turn the eonomy around. Injecting cash into the market can function to increase productivity boosting the GDP, it can also lead to inflation; However, all of these factors are dependent on the circulation of money being pumped into the market. If stimulus checks sit around as savings in banks, it does not influence inflation and also doesn't help the economy.

This suggests why the cash injection which has been going into the market may not increase inflation as most people fear. The pandemic has created an unconducive environment for production, reducing the velocity of money flow and conversely reducing its effect on inflation. This is why I think countries would feel the effect of money printing at a time in the future when the economy has recovered and all those idle money returns to circulation.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: DooMAD on October 16, 2020, 04:48:01 PM
Quote
some investors are keeping a close eye on a surge in the U.S. money supply for signs of inflation’s long-awaited return.

Inflation's return?  Where has it been?  Hope it had a nice trip.  I hadn't realised it was absent.   ::)

If anyone is under the impression it's a "return", I can't help but think they just haven't been paying attention.  Governments and retailers are doing everything to try and mask the issue, but that doesn't mean it isn't there.  We've had "shrinkflation" with food portions getting gradually smaller so they can charge a similar amount for less food.  We've been flirting with ZIRP and NIRP for some time now.  And, generally, it still feels like the prices for most goods and services is steadily rising.

I think instead of "long-awaited return", what they actually meant was "sudden but predictable acceleration".


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: Broly46 on October 16, 2020, 06:38:10 PM
If I ever understand as little as 1% of what they’re talking about, I think they’re telling people to keep spending money, keep borrowing more money, keep taking more loan, and that will fix the inflation miraculously.

Quote
Economist and former Treasury official Nathan Sheets counters that if businesses aren’t inclined to spend, the larger money supply may do little to fan inflation.

That quote was a description of the relationship between fiscal policies, GDP growth and inflation. During a recession, just as this one, banks adopt policies to cushion the effect and turn the eonomy around. Injecting cash into the market can function to increase productivity boosting the GDP, it can also lead to inflation; However, all of these factors are dependent on the circulation of money being pumped into the market. If stimulus checks sit around as savings in banks, it does not influence inflation and also doesn't help the economy.

This suggests why the cash injection which has been going into the market may not increase inflation as most people fear. The pandemic has created an unconducive environment for production, reducing the velocity of money flow and conversely reducing its effect on inflation. This is why I think countries would feel the effect of money printing at a time in the future when the economy has recovered and all those idle money returns to circulation.

Yup in a laymen term, bank can control everything, we are all under the mercy of their policing.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: beerlover on October 16, 2020, 06:44:26 PM
It is quite true that when politicians decide on the faith of the economy and not the economists, things usually do not look good for that nations economy. Not only because economists know economy better than politicians, because that is not always true, if the politician is considering the best interest of the public (rarely ever happens unfortunately) and economists thinks of their rich friends, that means politician "may" make a better decision.

The real reason is the fact that fed knows the big rich whales and if there is anything that is done by politicians to upset them that fed is against, that means those whales could hurt the economy more than the stimulus or anything else could help the world. Hence, I think networking and knowing what would upset the markets is a big deal too.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: exstasie on October 16, 2020, 08:38:38 PM
The mainstream media acknowledges the US monetary supply is growing at its fastest rate since the 1980s. Inflation is becoming a legitimate concern. Savvy investors are putting their money in gold and bitcoin in an effort to avoid having their wealth be devalued.

This scenario is one that has been mentioned and discussed on this forum countless times over the years. I wonder what people think of this.

I hadn't remembered that inflation was so high in the early 80s. Different circumstances, but it's interesting to note what happened back then: a double dip recession in G7 countries. (https://en.wikipedia.org/wiki/Early_1980s_recession) A short-lived recession followed by a short-lived recovery, followed by a deeper and more painful downturn. I've been pondering whether the current recession will end up the same, given the V-shaped recovery in the markets, the fundamental uncertainty about the pandemic, and the monetary policies being enacted in reaction to it.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: Silberman on October 16, 2020, 08:42:12 PM
That quote was a description of the relationship between fiscal policies, GDP growth and inflation. During a recession, just as this one, banks adopt policies to cushion the effect and turn the eonomy around. Injecting cash into the market can function to increase productivity boosting the GDP, it can also lead to inflation; However, all of these factors are dependent on the circulation of money being pumped into the market. If stimulus checks sit around as savings in banks, it does not influence inflation and also doesn't help the economy.

This suggests why the cash injection which has been going into the market may not increase inflation as most people fear. The pandemic has created an unconducive environment for production, reducing the velocity of money flow and conversely reducing its effect on inflation. This is why I think countries would feel the effect of money printing at a time in the future when the economy has recovered and all those idle money returns to circulation.
Personally I think we are headed to a scenario similar to what happened to Germany after World War I, during that period of time the government got out of the gold standard and began printing money like crazy but people fearing for their futures saved every single penny and inflation did not occur, but then when the war ended and they lost, there was huge inflation as people finally decided to spend their money only to find out that it bought almost nothing, I think the inflation we are experimenting is very low compared to the amount of money being printed which means that most people are storing that money for a rainy day but once it is clear that inflation may not be under the government control that is when we will see the true inflation generated during this pandemic and on the decades before it.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: The Sceptical Chymist on October 16, 2020, 10:44:22 PM
Inflation is becoming a legitimate concern. Savvy investors are putting their money in gold and bitcoin in an effort to avoid having their wealth be devalued.
It's been a concern for a while now, but for whatever reason we haven't seen rampant inflation (Venezuela, Zimbabwe, and one or two other countries aside) yet.  I'm not sure why that is, because this out-of-control money printing has been going on for years now, and interest rates have been near zero for about as long.  But just because the inflation tidal wave hasn't hit our shores yet doesn't mean it's never going to.

This sort of makes me wonder if this is the reason why corporations like MicroStrategy and some others have been buying bitcoin to keep on hand in lieu of cash.  To me, that seems like an incredibly unorthodox move for any publicly traded company--but it could well be the case that they see the disaster coming from a vantage point that the rest of us don't have access to.

These are crazy numbers, Hydrogen.  It might be a good time to be buying both bitcoin and gold, but I'm still not comfortable with what might be on its way.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: n0ne on October 16, 2020, 11:03:14 PM
Inflation is becoming a legitimate concern. Savvy investors are putting their money in gold and bitcoin in an effort to avoid having their wealth be devalued.
It's been a concern for a while now, but for whatever reason we haven't seen rampant inflation (Venezuela, Zimbabwe, and one or two other countries aside) yet.  I'm not sure why that is, because this out-of-control money printing has been going on for years now, and interest rates have been near zero for about as long.  But just because the inflation tidal wave hasn't hit our shores yet doesn't mean it's never going to.

This sort of makes me wonder if this is the reason why corporations like MicroStrategy and some others have been buying bitcoin to keep on hand in lieu of cash.  To me, that seems like an incredibly unorthodox move for any publicly traded company--but it could well be the case that they see the disaster coming from a vantage point that the rest of us don't have access to.

These are crazy numbers, Hydrogen.  It might be a good time to be buying both bitcoin and gold, but I'm still not comfortable with what might be on its way.
Other than few countries thats been mentioned we don't get to see inflation in such a higher level. In these countries uncontrolled money printing has lead to inflation, in some countries the treasury funds and the emergency funds kept as reserve is being distributed to make better money flow. With the shut down of industrial sectors the entire money circulation is being stopped. Governments try to overcome with similar plans, but those aren't effective for the common man.

Maybe in future governments can also take the stand of holding bitcoin same as the publically trading companies have done to keep up their market value.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: exstasie on October 17, 2020, 12:44:36 AM
Inflation is becoming a legitimate concern. Savvy investors are putting their money in gold and bitcoin in an effort to avoid having their wealth be devalued.
It's been a concern for a while now, but for whatever reason we haven't seen rampant inflation (Venezuela, Zimbabwe, and one or two other countries aside) yet.  I'm not sure why that is, because this out-of-control money printing has been going on for years now, and interest rates have been near zero for about as long.  But just because the inflation tidal wave hasn't hit our shores yet doesn't mean it's never going to.

Places like Venezuela are in a very different situation. They have an extremely homogeneous economy that is completely dependent on oil exports at high enough prices. They are also targeted by crippling economic sanctions. They are also characterized by rampant institutionalized corruption which goes hand in hand with excessive money printing (right into their own pockets) which obviously erodes confidence in the currency. The same situation applies to Zimbabwe. We're also talking about very different degrees of money supply expansion when comparing Zimbabwe and the US.

Undeveloped and emerging economies also simply don't have the luxury of money printing the way the US does. The nature of the global financial system is such that there is always robust global demand for USD, particularly because there is so much dollar denominated debt in the world. There is no such demand for fledgling currencies issued by small, weak governments. In comparison, there is quite a lot of faith in the US government and in the US economy, as the largest economy in the world.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: Darker45 on October 17, 2020, 02:12:16 AM
Unfortunately, the urgent need for more and more money is there. So the Fed cannot just easily pull out a considerable amount from the circulating supply into thin air in order to somehow counter the incoming huge inflation wave. It is imperative during this pandemic to try to keep the economy afloat in whatever means necessary despite the fact that stores are closing, companies retrenching, others even declaring bankruptcy, people losing their job, and so forth.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: Ozero on October 17, 2020, 05:55:10 AM
Unfortunately, the urgent need for more and more money is there. So the Fed cannot just easily pull out a considerable amount from the circulating supply into thin air in order to somehow counter the incoming huge inflation wave. It is imperative during this pandemic to try to keep the economy afloat in whatever means necessary despite the fact that stores are closing, companies retrenching, others even declaring bankruptcy, people losing their job, and so forth.
The growth in the amount of money supply has always indicated the inevitability of inflation growth. The current inflation can be very strong and lead to a rather severe economic crisis. This has been discussed periodically for a long time. The onset of the second wave of the coronavirus pandemic has again sparked talk of an economic crisis. If it does come, it is possible that the crisis could have a positive effect on the popularity and demand for cryptocurrency. We also talk about this for a long time, but we do not have such experience yet. This may be the first global economic crisis during the existence of a cryptocurrency.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: davis196 on October 17, 2020, 06:21:25 AM
This money supply growth will lead to inflation only in the US stock and asset markets(in the form of price bubbles).Consumer inflation in the USA will most likely stay low at around 2%.
Gold price might hit the moon(above 2K USD),but I have doubts that Bitcoin will follow that trend and hit a new ATH.At some point,the FUD "machine" will start shitting over Bitcoin and the BTC price will hit a wall.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: mariah.sadio on October 17, 2020, 06:25:48 AM
Government find new solution for the crisis. However, this will make the situation even worse in the next years. Inflation will burn this money sooner or later


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: Febo on October 17, 2020, 04:13:00 PM
Money supply definitely made a leg up compared to trend of last 10 years. But this is not all. Right now we are at start of second wave. Lock downs will only start and again last for few months. No way by any miracle that not happen. Miracle we need is to get vaccine before 3rd wave. If we get hit by 2ed wave and few months of lock down in spring we will really be doomed. Well everyone that is hedged in Bitcoin will of course be fine. Everyone else a big :(


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: ilovealtcoins on October 18, 2020, 06:19:41 AM
The more money they print, the harder it is to liquidate the entire money they've printed. The value of the US dollar will certainly decrease compared to other currencies. We need to accept our current economies and reform them in new ways even though it takes time, every time we print more money runs the risk of crumbling the economy.
Printing more money only makes the rich richer and the poorer. People are exploited when their money is in their wallets, printing more money just makes things more inflationary. There will come a day when the situation is irreversible and forced to convert to another currency.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: teosanru on October 18, 2020, 06:36:13 AM
Yes this is one of our most dire concerns. The huge money supply needs a strong back support , the country must be able to tolerate it , but unfortunately due to the pandemic I don't believe that they can keep this up for long.

The Inflation is bound to affect not only the people but the country as a whole , but I do believe it's going to be worse for the nations who rely on import, even of basic things like flour and vegetables.

Quote
The countries that are heavily relying on imports food are Mexico, Japan, S-Korea, Egypt. With the exception of China, the proportion of the globally imported food for most other countries is relatively small (usually less than 20%)..
{Taken from google}

So these countries will be worst hit eventually.

The zero interest rates aren't helping actually, people are taking loans more and eventually they would have to pay off somehow, it might stimulate economic activity for a while but unfortunately right now every country is at a peak.

We need more job creation.
More production of foods and other resources in the countries themselves.
Better and cheaper healthcare facilities right now.
Free distribution of masks and gloves , because I have seen shops selling masks for 0.5$ -1$ , unaware that this would just cause more problems.

We need to go though this pandemic without loosing the value of the printed money.
I think this is because of the fiscal deficits pushed by almost all the countries. Moreover even US has announced a major fiscal deficit and the International institutions like World Bank and IMF too have announced a lot of relief measures in USD so it's obvious that money supply would be increased. But yes the inflation rate looks pretty disturbing. I would grow another contrast here. While inflation rate is higher the LIBOR is at all time low. Which means even with interest rates too low they are not able to keep down the inflation.

3 Months LIBOR data of 2020 :

https://cdn-graphs.homefinance.nl/gr/graphs/gr-libor-chart-9-21-2020.jpg

Graph of long term interest rate development from 1980s to today:

https://cdn-graphs.homefinance.nl/gr/graphs/gr-libor-chart-10-21.jpg
 Source of charts: global-rates.com

You can see how the long term LIBOR is also at all time low in the history. This means even the credit facilities have become enough lucrative yet people are not interested in taking credit to expand their businesses due to other prevalent risks in market. This I think is pretty interesting situation. Either they are trying hard to bring back the consumer production and spending in the market or this is a sign of a economic flux.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: Dorodha on October 18, 2020, 07:44:02 AM
The corona virus has slowed the growth of money supply with the economies of all countries but the reason for the loss of the United States is the rapid adoption of the economy. Most of the companies in the sector were closed at the time of Corona so growth was not expected. Which can cause inflation monetary inflation will bring the country's economy down a lot, which can lead to a terrible situation inflation is also expected to remain close to the target at the end of the financial year due to the desired improvement in the supply situation in the economy due to a slight rise in commodity prices in the international market.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: proTECH77 on October 18, 2020, 03:07:30 PM
Covid-19 has caused so many hardship in the country that is making some countries to overcome the hardship in the country. Many government has print more money to end the virus and save the people from hardship that is treating the citizens in the country.
I think the money supply by the government to end the hardship is not enough for what covid-19 has destroy in the country.  Upon all the money my country has printed to assist the citizens to grow their businesses and other things for what corona virus has caused the economy of the country.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: bitgolden on October 18, 2020, 03:49:44 PM
Would you take a credit and expand your business in this situation right now? Obviously people are not certain about what the future will be like which makes them not take out credit and risk their business.

Let's assume you have a business, and you are making 10k per month profit, if you take out a 250k loan you know what you will use it on and you will make 15k instead of 10k and you will repay your loan eventually and will also continue to have greater profit later on after your debt is paid, you will take that loan right? Almost everyone would take that loan without a doubt.

However when there is pandemic, political chaos and basically every economical anomaly you can think of, so if you take out that 250k, maybe something unexpected would happen and instead of 15k like you expected, you will make even less than the 10k you were making, so there is no need to risk it.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: davinchi on October 18, 2020, 08:12:49 PM
I doubt that consumer inflation could ever stay the same when there is this much money pumping into the market, you are giving hundreds of billions of dollars to people called stimulus and we are talking about once more, that means people will have a ton of money but when people have that much money to spend, it would be very hard to actually keep the prices same, it should be making the prices go up as well otherwise it would make no sense for companies to keep selling for the same price when everyone has a lot more money, if companies markets and stocks go up they would need to make even more profit for shareholders which would happen with increasing the price which would mean people would need to spend more and cause inflation.

This is of course in theory, we will have to wait and see after the stimulus is done again and maybe few months after that.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: sheenshane on October 19, 2020, 02:45:01 PM
I rather have my own conclusion about this and it might we had to expect that inflation will hit the US and this will affect everyone globally.

Time to move assets to gold and another store of value then. But there's still a way for the US to recover from losing the value of dollars. By making successful vaccines and creating more jobs from it and pursuing globalization because of it. They probably control almost anything though, WHO is on their side and most probably, they are the ones who run it, IMO.

Then it might just they had to approve a vaccine from them and franchise it to back up the dollars.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: henmark on October 19, 2020, 08:12:26 PM
The Inflation is bound to affect not only the people but the country as a whole , but I do believe it's going to be worse for the nations who rely on import, even of basic things like flour and vegetables.
This is my major concern about my country, I expect more from them. We have some mineral resources, we have so many things, but I don’t know why it is difficult for our government to strengthen those areas that will benefit economy. There are things we have naturally, but the government will still choose to import them, such a disgrace.

Instead of importing such things that we already have, why don’t they set up funds to support Businesses that are focused on those areas. That way we wouldn’t have to be importing, rather we export.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: Silberman on October 21, 2020, 04:48:55 PM
Inflation is becoming a legitimate concern. Savvy investors are putting their money in gold and bitcoin in an effort to avoid having their wealth be devalued.
It's been a concern for a while now, but for whatever reason we haven't seen rampant inflation (Venezuela, Zimbabwe, and one or two other countries aside) yet.  I'm not sure why that is, because this out-of-control money printing has been going on for years now, and interest rates have been near zero for about as long.  But just because the inflation tidal wave hasn't hit our shores yet doesn't mean it's never going to.
I think the reason that for the most part we do not see rampant inflation yet is because governments are playing a game of hide the currency, bankers and different powerful entities receive the money printed by central banks but they immediately invest it in the stock and bond markets, so that money never touches the real economy and remains as numbers on a computer screen, however things like the stimulus check given by Trump during the pandemic actually hit the real economy and the inflation is felt immediately as the people spend that money right away, and when we add the US dollar is the reserve currency of the world and countries do the equivalent of burying it underground then this explains why inflation is so low, but make no mistake once that money tries to enter the real economy and governments try to use it to buy real products and services inflation will shoot up like crazy.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: AmoreJaz on October 26, 2020, 12:06:50 PM
Unfortunately, the urgent need for more and more money is there. So the Fed cannot just easily pull out a considerable amount from the circulating supply into thin air in order to somehow counter the incoming huge inflation wave. It is imperative during this pandemic to try to keep the economy afloat in whatever means necessary despite the fact that stores are closing, companies retrenching, others even declaring bankruptcy, people losing their job, and so forth.
The growth in the amount of money supply has always indicated the inevitability of inflation growth. The current inflation can be very strong and lead to a rather severe economic crisis. This has been discussed periodically for a long time. The onset of the second wave of the coronavirus pandemic has again sparked talk of an economic crisis. If it does come, it is possible that the crisis could have a positive effect on the popularity and demand for cryptocurrency. We also talk about this for a long time, but we do not have such experience yet. This may be the first global economic crisis during the existence of a cryptocurrency.

though we dont like to prolong this pandemic crisis, yet, this crisis will somehow be contained once commercial vaccine is available for public. and we are looking this to happen by next year.
coz right now, they are still in clinical trials. look at the current stats regarding this vaccine devt. 6 are approved for early or limited use but still 0 approved for full use

https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html
https://i.imgur.com/FAXhk1A.png

below are just several articles discussing about the increase of interest in crypto, even crypto wallet, BRD reported to increase their number of users during this period. so this is actually the benefit from this pandemic. not that we like this pandemic but this situation opens doors to increase the number of crypto users and that is actually good for crypto community.

https://www.pymnts.com/cryptocurrency/2020/pandemic-sparks-mainstream-interest-in-bitcoin/
https://ia.acs.org.au/article/2020/cryptocurrency-booms-during-pandemic.html
https://techcrunch.com/2020/10/06/cryptocurrency-wallet-brd-reaches-6-million-users-driven-by-growth-in-latin-america-and-india/
https://timesofindia.indiatimes.com/readersblog/eduscribble/phenomenal-increase-in-crypto-trading-during-covid-19-pandemic-26307/

let's just hope that vaccine will be available soon so the government will get back on their feet and do what is necessary to uplift their respective economy


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: DooMAD on October 26, 2020, 12:35:07 PM
There will come a day when the situation is irreversible and forced to convert to another currency.

Arguably, the situation was irreversible from the offset.  It follows rationally that:

  • the greater the debt there is within the system, the more money they have to print from nothing to feed the debt
  • the more they print, the greater the debt becomes

Rinse, repeat.  It's a self-fulfilling prophecy.

Sure, money supply growth looks bad now.  But I guarantee it's going to look even worse in another 10 years if it hasn't collapsed already.  It was always going to go this way.  It's unavoidable.  There's a clear design flaw that makes failure inevitable at some point.  I'd imagine that's why satoshi went about it in a completely different way when they designed Bitcoin.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: palle11 on October 26, 2020, 01:07:59 PM
Government find new solution for the crisis. However, this will make the situation even worse in the next years. Inflation will burn this money sooner or later

Inflation is a breaker for economic growth. Most government need to look for means to solve the inflation problem because the world crisis is increasing daily and price of goods keep going high because of scarcity. If you check into the European economy, you see hike a little in price and that is going to affect the euro, meaning more euro is going to chase few goods and inflation gets higher.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: Mauser on October 26, 2020, 01:16:46 PM
Government find new solution for the crisis. However, this will make the situation even worse in the next years. Inflation will burn this money sooner or later

Inflation is a breaker for economic growth. Most government need to look for means to solve the inflation problem because the world crisis is increasing daily and price of goods keep going high because of scarcity. If you check into the European economy, you see hike a little in price and that is going to affect the euro, meaning more euro is going to chase few goods and inflation gets higher.

The thing is that inflation is not really that high at the moment. Sure food prices and services are rising, but there are other costs which are very low at the moment, like energy cost. In Europe for example the last two months we had a negative inflation even.

Euro area annual inflation was -0.3 % in September 2020, down from -0.2 % in August 2020.

https://ec.europa.eu/eurostat/statistics-explained/index.php/Inflation_in_the_euro_area (https://ec.europa.eu/eurostat/statistics-explained/index.php/Inflation_in_the_euro_area)


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: Silberman on October 26, 2020, 05:25:39 PM
There will come a day when the situation is irreversible and forced to convert to another currency.

Arguably, the situation was irreversible from the offset.  It follows rationally that:

  • the greater the debt there is within the system, the more money they have to print from nothing to feed the debt
  • the more they print, the greater the debt becomes

Rinse, repeat.  It's a self-fulfilling prophecy.

Sure, money supply growth looks bad now.  But I guarantee it's going to look even worse in another 10 years if it hasn't collapsed already.  It was always going to go this way.  It's unavoidable.  There's a clear design flaw that makes failure inevitable at some point.  I'd imagine that's why satoshi went about it in a completely different way when they designed Bitcoin.
While true I think you are being too nice by describing this as a flaw, this is how the system is designed on purpose, those in power have had several opportunities to correct what is happening and instead they push for this, this means they have an end game in mind and we are being conducted to it, what is that end game? I do not know, but to me this seems intentional, however it seems they could not predict that people will act against their wishes and create something as revolutionary as bitcoin that goes completely against what fiat currencies stand for.


Title: Re: Money Supply Growth Has Never Been As High As It Is Today
Post by: disconnectme on October 26, 2020, 06:47:18 PM
Extreme situation calls for extreme reaction, the way 2020 has pans out calls for extreme reaction and with these lock down people need government to step up. I do not have problem with the rate of money supply provided they are being implemented to the right source and resulting into high productivity.