The Money Supply and you - meltdown or meltup?

[mental_masturbator]

We need an alternate thread to the BTC one.

This is to discuss the many financial topics of our current once in a lifetime pandemic global shutdowns.

Money supply, inflation, deflation, unemployment, sharemarkets, property, rentals, metals, crypto.

I have debated with a number of friends that the demise of the current debt system results in a meltup of asset prices as QE gets pumped into markets to stabilise.

I guess it’s somewhat at odds of a collapse...... but what about employment? Wages?  The downward pressure on wages yet all financial markets are telling us we are having a gangbuster of a year.....

Does the middle class vanish? Will we see a widening of the wealth gap? Will universal basal income save the middle class?   Do we see a collapse of the consumerism lifestyle?

Lots of things to discuss so fire away!

The middle class of the U.S. was created as a result of the New Deal of the FDR administration which left no aspect of the country untouched.  FDR in turn was pushed to implement the New Deal by the collective force of the working class which was organized and increasingly militant.  The communist party, 2 socialist parties, a wave of unionization, and general strikes scared the ever-living crap out the capitalist class of the U.S.  The power of finance was tamed and wealth inequality was diminished via heavy taxation of the uber wealthy and implementation of the Glass-Steagall act.

The past ~40 years have seen the rolling back of every vestige of the New Deal.  Both political parties are corrupted and subservient to capital(Wall Street, deregulated and shadow banking, military/industrial/intelligence complex).  The media is wholly owned to push neoliberal ideology (this includes Fox so-called News, btw).  Unions are largely destroyed as less than 6% of the private sector is unionized.  Privatization is pushed as the answer to all that ails us, e.g. why in the world are we waiting for privately owned drug companies to distribute the COVID vaccines whilst they work out sweet-heart deals to enrich themselves further. 

In short, if we want a middle class to arise then we need to get active and force the powerful to concede. 

UBI on the surface seems like a good idea, but ultimately leaves in place the capitalist system. 

[Mayday]

On the topic of residential property, are there any bargain basement prices in areas like Las Vegas yet?

The GFC hit that area hard. Given it’s a pandemic, are they still heavily restricted in doing business?

Has anyone seen any flow on effect with the residential housing market?

[Mayday]

UBI on the surface seems like a good idea, but ultimately leaves in place the capitalist system.

The UBI becomes a step closer to socialism.

So the question becomes, which evil do people prefer? The course of destruction of your salary, job, home, everything you worked for and the requirement to start all over again?

Or do you sell your soul to the govt and accept UBI in that it will allow you to keep what you have.... but perhaps it closes the gap in how much one can progress in life.

If we choose UBI a question for one more rep is would someone decide to double down in debt against residential property with the assumption a boom happens once UBI and consumer inflation kick in?

There is also the consideration of what if they simply did a one time debasement of all currency? Hey everyone, add a zero to whatever currency you have. Those who own debt would effectively become kings.

[gib]

[Zillotch]

participation in crypto now, accelerates the infrastructure of diem.

there will be nowhere to go... no crypto.. metals, real estate commodities stocks.. bye bye

[SOMEPARTS]

On the topic of residential property, are there any bargain basement prices in areas like Las Vegas yet?

The GFC hit that area hard. Given it’s a pandemic, are they still heavily restricted in doing business?

Has anyone seen any flow on effect with the residential housing market?

No deals on anything you'd want to own right now.

Property is sky high due to low rates and relaxed guidelines....again.

Rural property is selling as soon as it's listed here(midwest) and rural land being split and new houses going up everywhere. I guess they all work for the govt.   

[SOMEPARTS]

The UBI becomes a step closer to socialism.

So the question becomes, which evil do people prefer? The course of destruction of your salary, job, home, everything you worked for and the requirement to start all over again?

Or do you sell your soul to the govt and accept UBI in that it will allow you to keep what you have.... but perhaps it closes the gap in how much one can progress in life.

If we choose UBI a question for one more rep is would someone decide to double down in debt against residential property with the assumption a boom happens once UBI and consumer inflation kick in?

There is also the consideration of what if they simply did a one time debasement of all currency? Hey everyone, add a zero to whatever currency you have. Those who own debt would effectively become kings.

The answer is they will do as much as possible to extract blood from the host without killing it. That's what parasites do. It's when they don't need the host that you have a problem.

Nobody is going to do anything - with $2 gas, low rates and DOW 30k...cheap calories and entertainment to scramble the common noggin. Nothing.

[TheGrinch]

The answer is they will do as much as possible to extract blood from the host without killing it. That's what parasites do. It's when they don't need the host that you have a problem.

Nobody is going to do anything - with $2 gas, low rates and DOW 30k...cheap calories and entertainment to scramble the common noggin. Nothing.

Agreed... but what is someone who is aware of the plan to do if there is no where safe to have any assets?

[Primemuscle]

The middle class of the U.S. was created as a result of the New Deal of the FDR administration which left no aspect of the country untouched.  FDR in turn was pushed to implement the New Deal by the collective force of the working class which was organized and increasingly militant.  The communist party, 2 socialist parties, a wave of unionization, and general strikes scared the ever-living crap out the capitalist class of the U.S.  The power of finance was tamed and wealth inequality was diminished via heavy taxation of the uber wealthy and implementation of the Glass-Steagall act.

The past ~40 years have seen the rolling back of every vestige of the New Deal.  Both political parties are corrupted and subservient to capital(Wall Street, deregulated and shadow banking, military/industrial/intelligence complex).  The media is wholly owned to push neoliberal ideology (this includes Fox so-called News, btw).  Unions are largely destroyed as less than 6% of the private sector is unionized.  Privatization is pushed as the answer to all that ails us, e.g. why in the world are we waiting for privately owned drug companies to distribute the COVID vaccines whilst they work out sweet-heart deals to enrich themselves further. 

In short, if we want a middle class to arise then we need to get active and force the powerful to concede. 

UBI on the surface seems like a good idea, but ultimately leaves in place the capitalist system.

These are all excellent observations and a good telling of the financial history of the U.S. and maybe much of the world. Identifying an issue is a first step. What is much more difficult is how changes can be made that could level out the inequity between the financial classes. As much as I hate posting it, I think there is much truth in this saying; the rich get richer and the poor get poorer. This continues until someone who has it all says, "let them eat cake" and a revolution commences as a result. Is history destined to repeat itself? Have we learned nothing from the mistakes of our ancestors?

[Primemuscle]

On the topic of residential property, are there any bargain basement prices in areas like Las Vegas yet?

The GFC hit that area hard. Given it’s a pandemic, are they still heavily restricted in doing business?

Has anyone seen any flow on effect with the residential housing market?

If the pandemic has impacted real estate more in one are than another is pretty easy to find out. Check any of the many real estate sites, such as Zillow , Truila and Estately. Check the asking price, time on the market and properties sold statistics. Honestly, I think it is too soon to evaluate the effect of the pandemic on the real estate market no matter where you live or want to live.

[Primemuscle]

No deals on anything you'd want to own right now.

Property is sky high due to low rates and relaxed guidelines....again.

Rural property is selling as soon as it's listed here(midwest) and rural land being split and new houses going up everywhere. I guess they all work for the govt.   

This examples what is currently happening in Oregon. I maintain that it is all a matter of supply and demand. As the population increases so will the demands on housing.

[IroNat]

Agreed... but what is someone who is aware of the plan to do if there is no where safe to have any assets?

You want safety buy gold.  Safe but lousy return (historically only matching inflation) and expensive to store and protect.  How a bout a insured savings account at your bank earning 0.1%?

Your best bet (if you don't want the responsibilities of running a business or rental real estate which is really a part-time/full-time job and not everyone is suited for landlordship) is to properly allocate your investment in bonds, cash, and stocks.

You just have to be willing to ride out periodic market fluctuations without panicking.

You need a way to create money to invest first of all.  This could be your job, a side job, or a business you start, which could include rental real estate if it has cash flow.

Investing in stocks,bonds, etc is not a get-rich-quick method.  It's a way to grow wealth you've generated in other ways.

So, figure out a way to generate excess money over and above what you need for living and invest it. 

You need to live below your means (whatever that is) and invest the rest.

The immigrant success story is starting a small cash business (like a dry cleaners), sleeping on rice sacks in the back room, eating rice and beans, and saving and re-investing every spare cent in either the business, real estate, or something that throws off cash flow.

[oldtimer1]

This stimulus money isn't money the US has in a piggy bank somewhere. The US doesn't have it. They are essentially printing money. When Biden gets in with taxes, regulation and spending on big new programs inflation will happen as the dollar is devalued. It won't happen till he's in for year or two. The blue states will open ending the shut downs and the economy will soar for a year or two. Biden will gloat reading his teleprompter. Then the economy will crash due to insane capital gains tax on houses and stock market gains. The stock market will crash with a rush to sell off and unemployment will rise due to fewer jobs from the stock crash. Goods will sky rocket in prices.  Biden will then blame Trump.

[SOMEPARTS]

Agreed... but what is someone who is aware of the plan to do if there is no where safe to have any assets?

Be miserable. 


My advices? BUY LAND, as in acreage...in a red state....1/2 hour to 1 hour from a major metro.

Land that is subject to only township taxes.

The township trustees of these townships usually happen to own the most land themselves and will not tax the hell out of them or their family farm trusts.

Now, after that start an internet or cash business and put in a big garden. Find a woman that can stay off of Facebook. 

Get out of the way of all that is coming - get the target off your back. That is how you hedge.

Just IMO, and what I am doing.

[OneMoreRep]

This stimulus money isn't money the US has in a piggy bank somewhere. The US doesn't have it. They are essentially printing money.

It's called monetizing the debt. The Federal Reserve is literally buying US BONDS (IOUs from the Federal Government), which in turn places the USA under more debt burden. The money retrieved from the Federal Reserve is then pumped into circulation, mostly via digital means, but also by way of hard paper currency in the form of stimulus payments + government funding projects. It leads to inflation, as this year alone the Federal reserve after both relief packages have infused $4.6 Trillion into the US economy. It's a terrible idea, which also artificially props up the economy and makes the market stay on life support while sporting "all-time" market highs. People get these bullshit stimulus checks + unemployment, spend like there is no tomorrow and of course spend on popular brands that are also publicly traded in the stock market. Why wouldn't the market be artificially inflated, when people are just getting Fed Reserve money and reinvesting it into those S&P 500 companies by buying their products? Not to mention that the biggest companies in the US also get relief packages for PPP programs (paycheck protection programs) and corporate bailout assistance like the airlines received. It's all artificial and it's leading to one of the largest debt bubbles this country has ever seen. Ridiculous!

When Biden gets in with taxes, regulation and spending on big new programs inflation will happen as the dollar is devalued. It won't happen till he's in for year or two. The blue states will open ending the shut downs and the economy will soar for a year or two. Biden will gloat reading his teleprompter. Then the economy will crash due to insane capital gains tax on houses and stock market gains. The stock market will crash with a rush to sell off and unemployment will rise due to fewer jobs from the stock crash. Goods will sky rocket in prices.  Biden will then blame Trump.

Inflation will happen because we keep pumping money into our economy, further inflating the current balloon of US currency. Biden's taxes will further cripple the wealthy and their financial suffering is what will "Trickle Down" and effect the poor, as prices for goods and services will rise (let the poor take the hit of the tax raises). This is the alternative meaning to trickle down economics. I agree with you in that our economy as a whole will collapse.

Make way for China motherfuckers, because the writing is on the wall.

Chaos, I'm moving in!

"1"

[_bruce_]

Definitely a world wide war on the middle class happening right now.  The "basic income" is a path towards governments controlling consumerism.

[Marty Champions]

It's called monetizing the debt. The Federal Reserve is literally buying US BONDS (IOUs from the Federal Government), which in turn places the USA under more debt burden. The money retrieved from the Federal Reserve is then pumped into circulation, mostly via digital means, but also by way of hard paper currency in the form of stimulus payments + government funding projects. It leads to inflation, as this year alone the Federal reserve after both relief packages have infused $4.6 Trillion into the US economy. It's a terrible idea, which also artificially props up the economy and makes the market stay on life support while sporting "all-time" market highs. People get these bullshit stimulus checks + unemployment, spend like there is no tomorrow and of course spend on popular brands that are also publicly traded in the stock market. Why wouldn't the market be artificially inflated, when people are just getting Fed Reserve money and reinvesting it into those S&P 500 companies by buying their products? Not to mention that the biggest companies in the US also get relief packages for PPP programs (paycheck protection programs) and corporate bailout assistance like the airlines received. It's all artificial and it's leading to one of the largest debt bubbles this country has ever seen. Ridiculous!

Inflation will happen because we keep pumping money into our economy, further inflating the current balloon of US currency. Biden's taxes will further cripple the wealthy and their financial suffering is what will "Trickle Down" and effect the poor, as prices for goods and services will rise (let the poor take the hit of the tax raises). This is the alternative meaning to trickle down economics. I agree with you in that our economy as a whole will collapse.

Make way for China motherfuckers, because the writing is on the wall.

Chaos, I'm moving in!

"1"

Bidens increased cap gains taxes starting in 2022 will stunt all small buisness from growing. So those taxes will stick to 2026 . I dont see china as a player or anything of influence. America will become more crowded and work scarce. People will get jacked up on food with nothing to do

[Humble Narcissist]

Bidens increased cap gains taxes starting in 2022 will stunt all small buisness from growing. So those taxes will stick to 2026 . I dont see china as a player or anything of influence. America will become more crowded and work scarce. People will get jacked up on food with nothing to do

Universal Basic Income.  If not, there will be an overthrow.

[IroNat]

UBI is coming.

Increased automation and use of robots in doing things will lose jobs.

Corporations will pay less in wages and have increased profits using automation.  So they will be taxed to provide UBI.

How they will keep these corps. from outsourcing their businesses will have to be dealt with. 

Similar to a new tax on electric cars to make up for the shortfall in gas taxes used for highway and road repairs.

[OneMoreRep]

Bidens increased cap gains taxes starting in 2022 will stunt all small buisness from growing. So those taxes will stick to 2026 . I dont see china as a player or anything of influence. America will become more crowded and work scarce. People will get jacked up on food with nothing to do

I can agree with everything, except the bold.

The writing is on the wall regarding China. If not sure what I mean, let me know and I can expand on this point.

"1"

[Humble Narcissist]

UBI is coming.

Increased automation and use of robots in doing things will lose jobs.

Corporations will pay less in wages and have increased profits using automation.  So they will be taxed to provide UBI.

How they will keep these corps. from outsourcing their businesses will have to be dealt with. 

Similar to a new tax on electric cars to make up for the shortfall in gas taxes used for highway and road repairs.

They are already doing it in South Korea.  There are going to be so many jobs lost in the next year they will have to do it and that's before you factor in automation.

[FitnessFrenzy]

Increased automation and use of robots in doing things will lose jobs.

Corporations will pay less in wages and have increased profits using automation. 

buy growth stocks

[SOMEPARTS]

Charts don't matter until they do.

MBS = mortgage backed securities. The Fed owns twice as much as in the last housing crash and it's going parabolic.

[OneMoreRep]

Charts don't matter until they do.

MBS = mortgage backed securities. The Fed owns twice as much as in the last housing crash and it's going parabolic.

Pretty scary huh?

The Federal Reserve already owns about 34% of outstanding mortgage bonds (MBS). That means that they own 1/3rd of all outstanding mortgages (i.e. homes in the market). This is dangerous, when you consider that if a homeowner defaults on a mortgage, the bondholders (the Federal Reserve in this case) have a claim on the value of the homeowner's property. The property can be liquidated with the proceeds used to compensate bondholders (i.e. The Fed). Put 3 home owners in a room with individual mortgages and one of their homes is essentially owned by the FED.

Additionally, the Federal Reserve already holds about $7 trillion in US debt (a little under half of the actual US GDP & stated differently about 20% of total US debt). Counter-argument to this is that of course another 78% ($21 Trillion) of US debt is owned by the public (in the form of Social Security and pension funds), but even so, this is a terrible direction we are heading in.

"1"

[Mayday]

Universal Basic Income.  If not, there will be an overthrow.

Technically already in play in many countries.

We have a govt program in place already due to COVID which is AUD3k/mth. It’s supposed to end in a couple of months but that will be a death sentence.

Many European countries have effectively subsidised 30% of salaries in place today.

Central banks will spend 2021 reviewing existing programs to figure something out longer term. Today it’s stimulus policies approve by govt politics and the aim is to remove politics from the decisions so it becomes part of the money supply control.