House mortgages

[biglentil]

I don't believe in ghosts nor the deflationary boogeyman. Walk into home depot lately? Or an ag equipment stealership? Price out some land?

Its arbitrary that nominal rates aren't negative. In real terms they already are because price inflation is running much hotter than 50 basis points. Savers are getting squeezed and an asset bubble inflated. The true definition of inflation is an increase in the money supply, price inflation is the symptom that lags behind. What we have is stagflation. More fiat dollars chasing fewer goods. Universal income will be ⛽ on the 🔥. We will see plenty of velocity with no incentive to be productive. A perfect storm that will unleash a cat from the bag thats impossible to put back in without severe consequences.

[errolanderson]

I don't believe in ghosts nor the deflationary boogeyman. Walk into home depot lately? Or an ag equipment stealership? Price out some land?

Its arbitrary that nominal rates aren't negative. In real terms they already are because price inflation is running much hotter than 50 basis points. Savers are getting squeezed and an asset bubble inflated. The true definition of inflation is an increase in the money supply, price inflation is the symptom that lags behind. What we have is stagflation. More fiat dollars chasing fewer goods. Universal income will be ⛽ on the 🔥. We will see plenty of velocity with no incentive to be productive. A perfect storm that will unleash a cat from the bag thats impossible to put back in without severe consequences.

All deflation needs is; a stock market readjustment and a taste of economic reality. Then without the manipulation of hapless central banks, markets are stuck to fend on-their-own. This may be the beginning of an extended period financial write-offs. Aka: 2021. Inflation will not do well in this market scenario (IMO).

[the big wheel]

All deflation needs is; a stock market readjustment and a taste of economic reality. Then without the manipulation of hapless central banks, markets are stuck to fend on-their-own. This may be the beginning of an extended period financial write-offs. Aka: 2021. Inflation will not do well in this market scenario (IMO).

Write offs for who? Personal debts or corporates and banks only?
The way I see some spending they have to be anticipating it’s all free because looking at their incomes it doesn’t match.

[errolanderson]

Write offs for who? Personal debts or corporates and banks only?
The way I see some spending they have to be anticipating it’s all free because looking at their incomes it doesn’t match.

This money printing party is coming to an eventual and abrupt end (IMO) . . . . We will all be impacted by write-offs and QE (stimulus) fallout.

[AlbertaFarmer5]

This money printing party is coming to an eventual and abrupt end (IMO) . . . . We will all be impacted by write-offs and QE (stimulus) fallout.

Why would we purposefully end a party that has worked so well and for so long?

[biglentil]

Why would we purposefully end a party that has worked so well and for so long?

The Fed tried to normalize interest rates and shrink its balance sheet prior to Covid and failed miserably. There will be no unwind like Errol thinks. Powell at the recent Jackson Hole explicitly stated that the Fed is going to run inflation hot and won't be raising rates anytime soon. Central banks backs are against the wall. I can hear the printing press its going brrrrrrrrrrr.

[errolanderson]

Why would we purposefully end a party that has worked so well and for so long?

Money printing becomes ineffective. The current melt-up response in stock markets is unsustainable (IMO) while creating little true inflationary response (like right now). Central banks become effectively powerless creating no economy (like right now).

Deflation to central banks is like kryptonite to superman. Current fake economics have a definite shelf-life (IMO) . . . .

[biglentil]

Money printing becomes ineffective. The current melt-up response in stock markets is unsustainable (IMO) while creating little true inflationary response (like right now). Central banks become effectively powerless creating no economy (like right now).

Deflation to central banks is like kryptonite to superman. Current fake economics have a definite shelf-life (IMO) . . . .

I agree the additional qe is yielding less of a response in gdp growth. Hence the exponential nature of money printing to keep the economy from imploding.

But little true inflationary response really? Markets are making new highs, 2500 Tesla, million dollar combines, lumber prices trippled, copper up over $3/lb, nickel and zinc ripping higher, silver up nearly 200% since its March lows, gold flirting with $2000usd, used automobiles up, tuition up... The real rate of the cpi is much higher than the official rate. M3 money supply has increased 12 fold since 1980 and the dollar has lost over 95% of its purchasing power since 1971.

[errolanderson]

I agree the additional qe is yielding less of a response in gdp growth. Hence the exponential nature of money printing to keep the economy from imploding.

But little true inflationary response really? Markets are making new highs, 2500 Tesla, million dollar combines, lumber prices trippled, copper up over $3/lb, nickel and zinc ripping higher, silver up nearly 200% since its March lows, gold flirting with $2000usd, used automobiles up, tuition up... The real rate of the cpi is much higher than the official rate. M3 money supply has increased 12 fold since 1980 and the dollar has lost over 95% of its purchasing power since 1971.

Apparently, 46 million Americans (about 15%) have now wiped out their emergency savings. This ratio may be similar in Canada. Asset values are likely to come under increased pressure as this financial crisis deepens.

[LEP]

Apparently, 46 million Americans (about 15%) have now wiped out their emergency savings. This ratio may be similar in Canada. Asset values are likely to come under increased pressure as this financial crisis deepens.

So are these the people spending and priming the pump or treading water? These are far more likely to be renters and people with few assets. Credit card companies are going to feel it but I don't think they are part of the great engine of growth.