Inflation bubbles over the horizon
Almost a fifth of ALL US dollars were created this year https://www.cityam.com/almost-a-fifth-of-all-us-dollars-were...
Almost a fifth of ALL US dollars were created this year https://www.cityam.com/almost-a-fifth-of-all-us-dollars-were...
> “We had these same concerns back in 2008/9, that it was going to trigger a surge in inflation. Clearly that didn’t happen.”
However, at this point, we are talking about a few decades with many predicted catalysts actually happening, but not the inflation surge itself.
There is ample reason to think it might still blow up in our faces.
In fact, we are starting to see places around the world whose local government started blocking real estate purchases from institutional investors as they were pricing families out of the market.
In the basket of goods that statistics use to "prove" there is no inflation.
They're not wrong, they're just speaking a different language than you are and don't agree with the definition of inflation.
This is because asset bubbles tend to pop over the long term and come back down to ground.
There's the idea of Cantillon effects where there's inflation in the kinds of things that rich people spend their money on. But that theory has attached to it the notion that inflation necessarily trickles down from there as the wealth trickles out, and economists will object to that because like the quote says it just hasn't been observed to happen (consistent with the fact that the rich keep getting richer and the poor keep getting poorer in this economy, and we're doing the opposite of "raising all boats").
Money is generally added to the economy by the banks when they trade cash for debt (i.e. make a loan). The whole idea behind giving banks more reserves is so that they can make more loans, which are capped by the government at some % of the bank's reserves.
So really the government is tweaking things for banks to get around their own rules... but none of this matters if banks aren't near their cap in loans, which none of them are. So it really is just political theater to make it seem like things are getting done.
Once you understand that, the supression of interest rates makes a lot more sense, because it is another way to encourage new loans (and keep existing ones manageable).
That kind of depends on who you are. If you are a central bank, and particularly one of the central banks that doesn't, by policy, not buy that class of securities, yes, you can (e.g., the Bank of Japan does.) If you are not a central bank, you can't buy anything with central bank reserves, and if you are, say, the Fed, you could, but you've made a policy choice not to.