Hyperinflation, the zombie economy and the everything bubble (that will never burst)

[hellhamster]

Fellow MMO-champs, this is a difficult thread, but it's something we have to talk about NOW, before IT happens LATER. I'm not an economist and I probably made some mistakes with my points, but the general gist of it is true. The facts of the matter are actually very simple but extremely serious, and should be taken into account when making financial decisions in the future:



1. The FED and ECB discovered that quantitative easing is the best way to solve monetary crises. They bailed out banks, institutions, hell, even entire countries by increasing money supply.

2. This increase in money supply is created out of thin air and should hold no value, but because it is used for various economic reasons, it holds value, even artificially. Those reasons include buying stocks, assets, bailouts, improving monetary policies, options, derivatives, gold reserves, oil reserves, other commodities, the list goes on. This is the beginning of a global zombie economy.

3. Normally the effect should have subsided after 2008-2012, but dropping the ball would signify a chain reaction of crises caused by a drain of liquidity.

4. Pumping money into the market wouldn't be a big issue as long as inflation is kept in check, but that is changing drastically due to the COVID crisis and the exponential increase in money supply in the last couple years, with no signs of stopping.

5. This so called inflation, even if it isn't technically inflation, causes the stock market to boom when unemployment is at all time high, house prices to go exponential due to demand, assets, cryptocurrencies and commodities are surging. Oil for example should be nowhere near the $50-$100 mark. We should be in a recession, but the stock market is at an all time high.

6. The real problems are slowly beginning to come to light. The gist of it is that wages across all sectors have been more or less unchanged, but the prices of everything valuable went up astronomically in the last years.

7. What does it mean? Hoarding fiat currency is going to be damaging, even in the short term. We are already seeing negative interest rates. I'm not a financial advisor nor is this advice, but diversifying by investing a part of your portfolio into anything tangible is a good idea right now, or at least should have been some years ago when prices seemed right.

8. The general consensus is that price speculation should be kept in check and not run amok as it does now, there is simply too much money flowing into the tech or financial sector simply based on speculation, and that should be backed by something tangible, ie. increasing wages. This is the effect of a zombie economy, which is basically backed by zombie money.

I'm not saying we are going the way of Weimar Republic in even the coming 10 years, but there is a definite cause for concern. The solutions are probably worse than the problem they are trying to solve. but that may change overnight.

I would really love to hear your thoughts on this.

[Endus]

6. The real problems are slowly beginning to come to light. The gist of it is that wages across all sectors have been more or less unchanged, but the prices of everything valuable went up astronomically in the last years.

This basically just is not true.

https://tradingeconomics.com/united-.../inflation-cpi

Inflation has remained relatively steady over the last 25 years. If anything, inflation's slightly lower than prior periods.

Are there issues with some product prices? Sure. Like video cards; absolutely ridiculous. But that's tied to other market issues, not the money supply or general inflation.

[hellhamster]

This basically just is not true.

https://tradingeconomics.com/united-.../inflation-cpi

Inflation has remained relatively steady over the last 25 years. If anything, inflation's slightly lower than prior periods.

Are there issues with some product prices? Sure. Like video cards; absolutely ridiculous. But that's tied to other market issues, not the money supply or general inflation.

I explained that with my post, while there is practically no real inflation, everything is basically a lot more expensive compared to a few decades ago, with a miniscule inflationary correction in wages that can't properly compensate or absorb this change.

This is the first real effect of this zombie economy.

[Endus]

I explained that with my post, while there is practically no real inflation, everything is basically a lot more expensive compared to a few decades ago, with a miniscule inflationary correction in wages that can properly compensate or absorb this change.

This is the first real effect of this zombie economy.

And that's not a statement that makes sense.

If everything is more expensive, that's what inflation is.

The inflation rate's been pretty steady over the last few decades, with no observable spike upwards due to bailout programs and such. Yes, wages have been largely stagnant, particularly minimum wage which has gone without an adjustment for inflation for far too long, but those are systemic failures distinct from inflation.

[hellhamster]

And that's not a statement that makes sense.

If everything is more expensive, that's what inflation is.

The inflation rate's been pretty steady over the last few decades, with no observable spike upwards due to bailout programs and such. Yes, wages have been largely stagnant, particularly minimum wage which has gone without an adjustment for inflation for far too long, but those are systemic failures distinct from inflation.

Obviously, inflation has been reported steady for the most part, but assets driven by speculation have quadrupled in price in the past decade or two and don't correspond to the projected inflation.

How much is your house worth now compared to 20 years ago? How much did your purchasing power change, ceteris paribus? A better question: how much is your money actually worth now compared to 20 years ago?

edit: money as it is compared to any asset.

[Endus]

Obviously, inflation has been reported steady for the most part, but assets driven by speculation have quadrupled in price in the past decade or two and don't correspond to the projected inflation.

How much is your house worth now compared to 20 years ago? How much did your purchasing power change, ceteris paribus? A better question: how much is your money actually worth now compared to 20 years ago?

edit: money as it is compared to any asset.

You're conflating completely separate things. The housing market is not a marker for inflation in general. Inflation has not spiked.

[PC2]

-We can stop printing and spending so much money if it's a problem.

-Money isn't an investment so people shouldn't even have much money anyways. If a person is holding a lot of money while it goes down in value then that's their problem.

-We can increase wages over time and reduce the cost of everything so our purchasing power isn't doomed to decline.

[HansOlo]

All these buzzwords created by the rich - to generate more money - because they are on some 'honorable' journey to help you out(just look at the youtube channels and who is behind them. As of now - these videoes are spreading even more and generating crazy amount of views). Or because people wants a crash to earn from it.

Nobody knows jackshite - the history books will tell you that. Even so - many professors and other smart folks recently admitted - that the current situation is more than ever bizzare and the current formulas can't be used as reference point anylonger(the greyzone just gotten too big).

Heads or tails?

[Mihalik]

The problems aren't tied to either the value of money or the amount of money on the market. Inflation is real and is what it is reported. What has declined is purchasing power.

The problem is how it is currently distributed. Most of the existing money supply is tied up on the upper ends of the speculative market. This is not some mystical issue, conspiracy or whatnot that would require complex theories to explain.

Our current predicament is the end result of decades of supply side voodoo economics. The fix is simple and straightforward. It's called wealth redistribution via progressive taxation.

[For_The_Horde]

Pretty much sums it up.

[Theodarzna]

Functionally the US economy died in 2008. That is, the economy normal humans operate within. It never actually recovered in any meaningful sense, especially in terms of employment. All that sustains it is the FED necromancy keeping the stock market animated via QE, and the fact that money never trickles down meaning we avoid inflation because money just sloshes forever in the stock market and never actually leaves that magical realm of make believe and money printers.

[Edge-]

and the fact that money never trickles down meaning we avoid inflation because money just sloshes forever in the stock market and never actually leaves that magical realm of make believe and money printers.

Yeah, but imagine all the theoretical money in the market!

[Theodarzna]

Yeah, but imagine all the theoretical money in the market!

Endless theoretical money, line goes up, the Line!

[Masark]

This basically just is not true.

https://tradingeconomics.com/united-.../inflation-cpi

Inflation has remained relatively steady over the last 25 years. If anything, inflation's slightly lower than prior periods.

That presumes that the CPI basket isn't out to lunch.

Rental costs make up 6.4% of the CPI basket, but for millennials, rent is routinely consuming in the vicinity of half of our income.

[Omega10]

Yeah, but imagine all the theoretical money in the market!

You made me laugh very hard Thank you!

[Omega10]

This could all either go very well or very bad:

This did not make me laugh at all.

There is so much uncertainty about the future, and it could be argued that things are getting less stable over time rather than more. So... I'm just taking it one day at a time

[Ettan]

Obviously, inflation has been reported steady for the most part, but assets driven by speculation have quadrupled in price in the past decade or two and don't correspond to the projected inflation.

How much is your house worth now compared to 20 years ago? How much did your purchasing power change, ceteris paribus? A better question: how much is your money actually worth now compared to 20 years ago?

edit: money as it is compared to any asset.

Inflation is calculated from the consumer price index (cost of goods in the market as a whole) and is only one factor here.
But it is also not the case that the inflation rates have been wrongly calculated, they are certainly accurate.
And have been very low for this period.

A larger factor (the biggest factor in this case) in determining prices in the housing market are the intrest rates.
->How (in)expensive is it to take on loans.

And if you havent noticed, the intrest rates have been at a reckord low.
Some countries have even set negative intrest rates (for the first time in history).

Now the intrest rates are definetly tied to the inflation rate, in a central bank system it is generally set in order to keep a balance between maintaining a steady low inflation rate, keeping the unemployment rate low and maintaining the overal growth. (It is not the case that you want 0 inflation, you actually want some).


When intrest rates are set low you essentially have the foot on the gas; relativly "expensive" to save, profitable to expand and take on loans :Available Jobs +
While the opposite holds true when the rates are high; the breaks are on: inflation is reduced :Available Jobs -

[Narwhalosh Whalescream]

I couldn't care less i have enough anxiety about the future with climate anyway.

[Afrospinach]

2. This increase in money supply is created out of thin air and should hold no value,

Currency's value it determined by the ratio of money vs goods and services. New money printed will never have "no value". You would think that someone so into crypto currencies would be aware of this lol. Literally minting new currency every day, sometimes even whole new currencies lmao, while issuing every BTC holder with equivalent coins in the new currency.

https://en.wikipedia.org/wiki/List_of_bitcoin_forks

Out of THIN AIR. Yet somehow still have some value. Odd, huh?

The fact that QE has not produced hyper inflation should tell you all you need to know, but honestly since you apparently have such an poor understanding of the fundamentals, maybe not. Why would anyone listen to someone who gets something so BASIC completely wrong? It is motif with people running around banging the cryptocurrency gong.

[hellhamster]

Currency's value it determined by the ratio of money vs goods and services. New money printed will never have "no value". You would think that someone so into crypto currencies would be aware of this lol. Literally minting new currency every day, sometimes even whole new currencies lmao, while issuing every BTC holder with equivalent coins in the new currency.

https://en.wikipedia.org/wiki/List_of_bitcoin_forks

Out of THIN AIR. Yet somehow still have some value. Odd, huh?

The fact that QE has not produced hyper inflation should tell you all you need to know, but honestly since you apparently have such an poor understanding of the fundamentals, maybe not. Why would anyone listen to someone who gets something so BASIC completely wrong? It is motif with people running around banging the cryptocurrency gong.

You didn't understand my post at all. The price ratio of assets, the stock market, commodities, precious metals, anything really, and crypto especially, versus wages is increasing exponentially because money is created out of thin air and is used to pump the first.

Someone linked a good video about it in the previous page if you still can't understand it, but I'm mostly focusing on the first effects of QE.