Author Topic: Is anyone worried about all the money printing?  (Read 1510 times)

SunshineAZ

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Is anyone worried about all the money printing?
« on: February 21, 2021, 10:02:00 AM »
Hi all,

With all the continuing lockdowns, relief packages, and the new relief packages they are getting ready to sign, is anyone concerned about the massive amount of money printing and how the devaluation of the dollar might change your calculations??  Also, how do you hedge for that in your investments?  International? Metals?  Crypto? (Most of my stuff is in Vanguard, if that helps.)  I am concerned but I really don't know how to hedge against it.  Any advice or enlightening discussion would be greatly appreciated.  Thanks!

seattlecyclone

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Re: Is anyone worried about all the money printing?
« Reply #1 on: February 21, 2021, 10:49:32 AM »
Nope, not too worried about inflation because I don't own many dollars. I mostly own shares in operating business. These businesses will adjust their prices and dividends to reflect any change in the value of the dollar, and the value of their shares should more or less keep up accordingly.

markbike528CBX

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Re: Is anyone worried about all the money printing?
« Reply #2 on: February 21, 2021, 11:04:58 AM »
Nope, not too worried about inflation because I don't own many dollars. I mostly own shares in operating business. These businesses will adjust their prices and dividends to reflect any change in the value of the dollar, and the value of their shares should more or less keep up accordingly.

What about '66-'79?   

Disclosure, 95% stocks, following seattlecyclone' s path.

SunshineAZ

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Re: Is anyone worried about all the money printing?
« Reply #3 on: February 21, 2021, 11:11:11 AM »
Nope, not too worried about inflation because I don't own many dollars. I mostly own shares in operating business. These businesses will adjust their prices and dividends to reflect any change in the value of the dollar, and the value of their shares should more or less keep up accordingly.

I thought about that, but eventually all the long term unemployment has to impact the economy overall.  It cannot continue on government bailouts forever.

maizefolk

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Re: Is anyone worried about all the money printing?
« Reply #4 on: February 21, 2021, 11:26:48 AM »

Devaluation of the dollar would likely cause a recession a stock market correction/crash in real terms, but for stocks it'd be no worse than a regular recession. The people who would see their financial independence completely derailed by higher inflation would be those who have a lot of their stash in bonds/cash.

Looking at the most extreme examples, stocks held a fair chunk of their value in purchasing power terms through hyperinflation in Germany, and more recently in Venezuela.*


(Notice that the German stock market data in german marks is plotted on a log scale and the same price data in US dollars is plotted on a linear scale)

*Venezuela's case is a little trickier because the official exchange rate is unrealistically optimistic but unofficial exchange rate is unrealistically pessimistic relative to the dramatic slide in purchasing power for their currency inside the country.

« Last Edit: February 21, 2021, 02:05:11 PM by maizefolk »

vand

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Re: Is anyone worried about all the money printing?
« Reply #5 on: February 21, 2021, 11:45:28 AM »
If you think that stocks hold their "value" during inflation then you're just dreaming.

What they do is they hold their earnings, but the get de-rated because nobody wants to pay 30-40 times for a future earnings stream when prices are going up 10% a year and you can get 13% on a 10yr note. So stocks de-rate to more sensible valuations consumate with the return that can be earnt elsewhere, say 8-10 times earnings. At least, this is what happened in the 1970s stagflation era.

The answer has always been to hold real assets: commodities (especially precious metals), real estate, and alternatives
« Last Edit: February 21, 2021, 12:09:32 PM by vand »

maizefolk

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Re: Is anyone worried about all the money printing?
« Reply #6 on: February 21, 2021, 12:12:14 PM »
The 1970s stagflation era is already in all the datasets people use when they simulate different safe withdrawal rate strategies so why lose sleep over that?

It's also worth remembering that the reason we talk about 1970s event as "stagflation" because of how unusual it was to be seeing economic stagnation combined with significant inflation as history before and since had suggested the two didn't usually go together. This is, at least in part, because the inflation of the 1970s resulted from a supply shock (oil embargo, price controls, and the fed response), rather than, initially at least, a demand shock of more dollars chasing after the same number of goods.

The concern SunshineAZ is posting about is that there may be too many dollars sloshing around the system increasing total demand in dollar terms. If that does end up producing inflation, it'll be much more on the Germany/Venezuela model than the 1970s "stagflation" model.

Vand, if you haven't read it, I'd highly recommend "When Money Dies" to get a broader sense of what high inflation looks like in different countries, rather than assuming the stagflation of the 1970s is representative of all periods of high inflation.

SunshineAZ

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Re: Is anyone worried about all the money printing?
« Reply #7 on: February 21, 2021, 01:34:52 PM »
The 1970s stagflation era is already in all the datasets people use when they simulate different safe withdrawal rate strategies so why lose sleep over that?

It's also worth remembering that the reason we talk about 1970s event as "stagflation" because of how unusual it was to be seeing economic stagnation combined with significant inflation as history before and since had suggested the two didn't usually go together. This is, at least in part, because the inflation of the 1970s resulted from a supply shock (oil embargo, price controls, and the fed response), rather than, initially at least, a demand shock of more dollars chasing after the same number of goods.

The concern SunshineAZ is posting about is that there may be too many dollars sloshing around the system increasing total demand in dollar terms. If that does end up producing inflation, it'll be much more on the Germany/Venezuela model than the 1970s "stagflation" model.

Vand, if you haven't read it, I'd highly recommend "When Money Dies" to get a broader sense of what high inflation looks like in different countries, rather than assuming the stagflation of the 1970s is representative of all periods of high inflation.

Thanks for your insight.  I am still a bit nervous, but seeing that data helped a bit.  :)

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Re: Is anyone worried about all the money printing?
« Reply #8 on: February 21, 2021, 02:02:53 PM »
Hi all,

With all the continuing lockdowns, relief packages, and the new relief packages they are getting ready to sign, is anyone concerned about the massive amount of money printing and how the devaluation of the dollar might change your calculations??  Also, how do you hedge for that in your investments?  International? Metals?  Crypto? (Most of my stuff is in Vanguard, if that helps.)  I am concerned but I really don't know how to hedge against it.  Any advice or enlightening discussion would be greatly appreciated.  Thanks!

The easiest way way is to get a nice big 30-year mortgage at 3% or less.  If inflation takes off, you'll look like a genius.

That said, I'm not too worried for a couple of reasons.  First, we have high unemployment right now, which pulls down wages, which pulls down prices.  The second is that the Fed governors all remember the 70s and are paranoid about inflation.   There is a lot of room to raise interest rates at the moment. 

Telecaster

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Re: Is anyone worried about all the money printing?
« Reply #9 on: February 21, 2021, 02:28:56 PM »
Nope, not too worried about inflation because I don't own many dollars. I mostly own shares in operating business. These businesses will adjust their prices and dividends to reflect any change in the value of the dollar, and the value of their shares should more or less keep up accordingly.

Warren Buffet wrote famous article in Fortune in 1977 on the effects of inflation on equities called "How Inflation Swindles the Equity In.  Here's crappy .pdf copy:

https://www.tilsonfunds.com/BuffettInflationSwindle.pdf

A bit of hunting might find something more legible.  However, it is a very lucid discussion of how equities behave during inflation.  It has been very helpful in my own thinking about stocks in general.   

MustacheAndaHalf

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Re: Is anyone worried about all the money printing?
« Reply #10 on: February 21, 2021, 07:24:41 PM »
If you're worried about U.S. inflation and not sure if U.S. stocks will hold up, you could increase the percentage of international in your portfolio.

I'm surprised portfolio visualizer doesn't have data before 1986 on international or emerging markets.  Time to look for a better data source ...

bwall

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Re: Is anyone worried about all the money printing?
« Reply #11 on: February 22, 2021, 04:27:03 AM »
With the demographic decline occurring worldwide it seems as if demand shortage will be the greatest constraint on economic growth moving forward. (Think: Japanification on a worldwide scale)

This should dampen inflation.

Add to this that central banks around the world are hovering up any USD they can find and socking it away, thus conferring depreciation via inflation from the US economy to their economy. This is the 'enormous privilege' of being a reserve currency. Britain felt the shocks in the post-war era when the Sterling lost that same privilege.


vand

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mistymoney

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Re: Is anyone worried about all the money printing?
« Reply #13 on: February 22, 2021, 08:40:23 AM »
https://moneyweek.com/economy/inflation/602814/which-assets-do-best-when-inflation-is-rising

pretty sure the study they refer to is the one I plucked out last year in this thread:

https://forum.mrmoneymustache.com/investor-alley/stocks-are-not-an-inflation-hedge/msg2392438/#msg2392438

interesting - but they really don't care about the color blinded, do they? Differentiating inflation protection by color with red green and amber?

question - on the table on page 28 of the report - what is the difference between energy and energy equity? aka - how does one invest in energy outside of stocks?

PDXTabs

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Re: Is anyone worried about all the money printing?
« Reply #14 on: February 22, 2021, 08:55:46 AM »
With all the continuing lockdowns, relief packages, and the new relief packages they are getting ready to sign, is anyone concerned about the massive amount of money printing and how the devaluation of the dollar might change your calculations??  Also, how do you hedge for that in your investments?  International? Metals?  Crypto? (Most of my stuff is in Vanguard, if that helps.)  I am concerned but I really don't know how to hedge against it.  Any advice or enlightening discussion would be greatly appreciated.  Thanks!

I worry more about the long term political stability of the US government and less about the money supply. I hedge by keeping 45% of my portfolio international, and nothing in bonds save for part of my EF in I-Bonds.

As to the 1970's, the 1970's was a period of time where workers could demand and receive more pay. That isn't today, at least not yet.
« Last Edit: February 22, 2021, 08:57:52 AM by PDXTabs »

vand

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Re: Is anyone worried about all the money printing?
« Reply #15 on: February 22, 2021, 09:26:51 AM »
https://moneyweek.com/economy/inflation/602814/which-assets-do-best-when-inflation-is-rising

pretty sure the study they refer to is the one I plucked out last year in this thread:

https://forum.mrmoneymustache.com/investor-alley/stocks-are-not-an-inflation-hedge/msg2392438/#msg2392438

interesting - but they really don't care about the color blinded, do they? Differentiating inflation protection by color with red green and amber?

question - on the table on page 28 of the report - what is the difference between energy and energy equity? aka - how does one invest in energy outside of stocks?

Energy is literally the commodity itself - oil, natural gas, coal etc.

Difficult to get exposure to traditionally (futures contracts do a very poor job because of the forward roll on contracts) which is why the density per $ of gold came in, but some of the newer ETFs like CMDY do a fairly decent job. see some discussion on https://forum.mrmoneymustache.com/investor-alley/commodities/

Energy equities are your Exxons and BPs.

@maizefolk , cheers, I will check it out. I am acutely aware that there are many possible "higher inflation" scenarios and that the 1970s experience may not at all be what the next inflationary period will look like.
« Last Edit: February 22, 2021, 09:34:41 AM by vand »

trollwithamustache

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Re: Is anyone worried about all the money printing?
« Reply #16 on: February 22, 2021, 09:47:35 AM »
Yes I worry about inflation, but really as many posters have pointed out (indirectly), inflation is a problem for the poor and not those on this board. carry on!

MustacheAndaHalf

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Re: Is anyone worried about all the money printing?
« Reply #17 on: February 22, 2021, 09:55:08 AM »
The study puts a neutral rating on gold, and a green rating for energy and commodities.  But energy and gold are listed in the commodities section - so is the recommendation everything else?  Agriculture vs inflation was +4% in 1970s, but -10% in 1980s.  Industrial metals had no performance available in those decades.

The study doesn't cover equities outside the U.S., but does consider "forestry/timberland" worth analysis.  Anyone who invests in that manner is missing the forest for the trees.

According to Portfolio Visualizer, small/value stocks had real returns of 6.2% (1972-1979) and 15.6% (1980-1989), meaning they beat inflation by those amounts.  Larry Swedroe can explain the reason why small/value does well under inflation better than I can.  Some critics of small/value argue that without the 1980s, there is no small/value effect.

I should probably mention over 1/6th of my portfolio is now oil stocks because of how well they've performed.  I guess that's my diversification, for now.

mistymoney

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Re: Is anyone worried about all the money printing?
« Reply #18 on: February 22, 2021, 10:03:31 AM »
With all the continuing lockdowns, relief packages, and the new relief packages they are getting ready to sign, is anyone concerned about the massive amount of money printing and how the devaluation of the dollar might change your calculations??  Also, how do you hedge for that in your investments?  International? Metals?  Crypto? (Most of my stuff is in Vanguard, if that helps.)  I am concerned but I really don't know how to hedge against it.  Any advice or enlightening discussion would be greatly appreciated.  Thanks!

I worry more about the long term political stability of the US government and less about the money supply. I hedge by keeping 45% of my portfolio international, and nothing in bonds save for part of my EF in I-Bonds.

As to the 1970's, the 1970's was a period of time where workers could demand and receive more pay. That isn't today, at least not yet.

now that is pretty pessimistic. how unstable are you hedging for? Is vanguard, et. al. international? Are you envisioning fleeing the country under cover of darkness?

maizefolk

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Re: Is anyone worried about all the money printing?
« Reply #19 on: February 22, 2021, 10:29:25 AM »
Energy is literally the commodity itself - oil, natural gas, coal etc.

Difficult to get exposure to traditionally (futures contracts do a very poor job because of the forward roll on contracts) which is why the density per $ of gold came in, but some of the newer ETFs like CMDY do a fairly decent job. see some discussion on https://forum.mrmoneymustache.com/investor-alley/commodities/

Yeah, the implosion of USO (an ETF which tried to track the price of oil) a few months ago was a thing to behold. Commodities could be a useful short term hedge if you know when inflation is going to hit, but over the long term the expected return (net of storage costs or the decaying value of futures contracts) is almost always going to be negative.

Agricultural land/timber land are probably one of the most "commodity like" investments out there with positive expected real returns. But the only easy way to invest in them without going out and buying them personally are REITs which tend to depend on non-fixed rate loans, in turn exposing one to a lot of risk from rising interest rates, which is ... not ideal in a high inflation scenario. I've debated off and on just buying some land directly, but at anywhere from $6,000-$12,000 an acre with the smallest tracts available tending to be in the 50-100 acres it requires a rather steep entry price, and it's not a particularly liquid investment even if in the long run it does tend to keep up with inflation while paying you for the privilege of owning it.

PDXTabs

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Re: Is anyone worried about all the money printing?
« Reply #20 on: February 22, 2021, 10:32:49 AM »
With all the continuing lockdowns, relief packages, and the new relief packages they are getting ready to sign, is anyone concerned about the massive amount of money printing and how the devaluation of the dollar might change your calculations??  Also, how do you hedge for that in your investments?  International? Metals?  Crypto? (Most of my stuff is in Vanguard, if that helps.)  I am concerned but I really don't know how to hedge against it.  Any advice or enlightening discussion would be greatly appreciated.  Thanks!

I worry more about the long term political stability of the US government and less about the money supply. I hedge by keeping 45% of my portfolio international, and nothing in bonds save for part of my EF in I-Bonds.

As to the 1970's, the 1970's was a period of time where workers could demand and receive more pay. That isn't today, at least not yet.

now that is pretty pessimistic. how unstable are you hedging for? Is vanguard, et. al. international? Are you envisioning fleeing the country under cover of darkness?

Well, no, if I was imagining fleeing the country under cover of darkness I wouldn't live in the USA with 55% of my portfolio in US equities. But you can have a pretty dysfunctional government for a long time and it doesn't necessarily mean that it will end in Syria style civil war or Venezuela style collapse.* But it could still really hurt economic and currency performance. But actually, now that you mention it, I do already hold two passports and they are both up to date.

* - for example, the UK, which had to produce a "Brexit" but as far as I can tell produced the worst possible outcome on the spectrum of Brexits. Or Turkey, etc.
« Last Edit: February 22, 2021, 10:57:09 AM by PDXTabs »

vand

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Re: Is anyone worried about all the money printing?
« Reply #21 on: February 22, 2021, 11:52:10 AM »
With all the continuing lockdowns, relief packages, and the new relief packages they are getting ready to sign, is anyone concerned about the massive amount of money printing and how the devaluation of the dollar might change your calculations??  Also, how do you hedge for that in your investments?  International? Metals?  Crypto? (Most of my stuff is in Vanguard, if that helps.)  I am concerned but I really don't know how to hedge against it.  Any advice or enlightening discussion would be greatly appreciated.  Thanks!

I worry more about the long term political stability of the US government and less about the money supply. I hedge by keeping 45% of my portfolio international, and nothing in bonds save for part of my EF in I-Bonds.

As to the 1970's, the 1970's was a period of time where workers could demand and receive more pay. That isn't today, at least not yet.

To me, the two are nearly always intrinsically linked.  Political turmoil and financial instability go hand in hand.

ChpBstrd

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Re: Is anyone worried about all the money printing?
« Reply #22 on: February 22, 2021, 01:28:05 PM »
Anyone worried that an increase in the supply of money will lead to a rapid decrease in the value of money needs to explain what happened between 2008 and 2019. Money supply through the roof and we barely avoided deflation by keeping the pedal on the metal with QE, record low interest rates, and historically low taxes - all leading to skyrocketing government deficits. We tried to cook up some inflation and barely got 2%, sometimes.

It seems there is some undertow dragging inflation lower than it could have gone in decades past. The usual suspects are:

1) Demographics: Old folks spend less on stuff because they must make savings last and because of medical risk. The US is rapidly greying, and has a percentage of its population over 65 that is where Japan was in the early 1990s. It was a different story in the 1970s when the boomers were young. Cash hoarding does not contribute to monetary velocity; it is disinflationary.

2) Emerging Market Trade: The USD is the world reserve currency, and is transacted globally. When we buy electronics from China or Volkswagens from Mexico, dollars exit the US economy and enter a foreign economy. Once in the foreign economy, some percentage of dollars stay there in the form of treasury reserves, dollar denominated savings accounts, paper cash, or simply circulating in transactions outside the US. As emerging economies grow, they absorb more and more dollars. Thus the number of dollars circulating inside the US economy, where they can affect the price of goods, would drop unless we continually printed more dollars to make up for the ones that left the country. The flow of dollars to fund foreign economies is roughly equal to our trade deficit (hundreds of billions of dollars per year). As these dollars disappear from the US economy, they remain in our statistics.

3) Student Loan Debt: What happens when a large chunk of an entire generation must pay off five and six figure debts before they can buy cars, houses, etc? This is a change from the past when earlier generations could graduate high school, get a union job, and start consuming immediately. If people in their 20s and 30s get a raise, at least some goes to debt service. Previous generations could devote 100% to consumption.

4) Housing Prices: In HCOL areas, housing is consuming more of people's incomes than in the past. This is simply a transfer from home buyers to home sellers, and does not affect the price of a basket of goods, except to the extent that home buyers have less disposable income available to consume other things besides housing. When home prices rise faster than incomes, each sale causes the house to consume more and more of its new owners' income. Additionally, each round of refinancing over the past couple of decades has cost homeowners at least a couple thousand dollars, partially offsetting the reduction in debt service obligations due to lower interest rates. The house-poor must reduce their consumption. Meanwhile the extra dollars they spend on housing sit stagnant in investors' accounts instead of circulating in the real economy. This means less monetary velocity.

5) Easier Carry Trades: It is easier now than in previous decades to borrow USD at low rates and speculate on foreign currencies with higher bond yields. Electronic markets mean even retail investors can buy foreign bonds and trade swaps to protect themselves against fluctuations. This was a lot harder generations ago. So as carry trades increase (e.g. borrow dollars at 2%, buy Columbian government bonds yielding 5%) the number of dollars exiting the US increases. These dollars never disappear from the stats.

6) Self-Held Debt: If tax cuts allow a rich US investor to put $100M into US treasuries, and require the government to borrow $100M to fund its operations, all that has happened between the two is the investor got an asset and the government got a debt. The net amount of change in money is zero, because negative $100M on the government's balance sheet is offset by positive $100M in the rich investor's account. Our stats such as M2, however, say $100M were created from thin air, and some folks could get alarmed by the thought $100M new dollars are circulating in stores and payrolls. Won't the government spend the $100M, thus injecting it into the US economy? Yes, but some of the money will have to be diverted to other rich US investors as interest payments, and some more will leave the economy (foreign aid, military base rents, employee remittances, imports, etc.). Also, had the US government not borrowed the $100M, it would still be in the hands of the rich investor, who would have spent it on something else anyway. The statistics say something big occurred, but good luck finding a net effect.

7) Illegal Immigrants & People Who Send Remittances: We should thank the 10-12 million people who live and work here without documentation. We should thank them not just for paying our taxes, but also because the remittances they send back home drain dollars from the real US economy and allow inflation and interest rates to be far lower than they'd be otherwise. Likewise, many citizens send remittances to their families in Latin America, Asia, and Africa. These transfers help both economies. The US gets to fund its government with printed dollars and underdeveloped economies get cash infusions. Same story: If you remove USD from the US economy, it's as if they don't exist.

8) The Fed's Ammunition Box: The Fed's nearly $8T balance sheet alarms some people, but really it is an insurance policy against inflation. When the Feds buy a treasury, or a bond, or a mortgage, they inject newly created money into the hands of the investor who sells that asset to them, thus adding cash to the economy. If inflation ever got out of hand, the Fed could simply reverse the transaction and sell the asset at whatever market price, thus removing cash from investors' hands and giving them an asset in return. Whereas quantitative easing is theoretically unlimited, quantitative tightening could only occur until the Fed ran out of assets to sell. Good thing they have $8T, and thus there is no credible reason to worry about out of control inflation! QE and QT have replaced interest rates as the primary way the Fed controls inflation. These tools are much more precise and have less collateral damage or unintended consequences than interest rates.

So for inflation to occur, old folks and indebted young people would have to start spending all their money on American-made goods and services, to the extent that this spending offset the trade deficit, remittances, carry trades, etc. to the point that the Fed couldn't slow monetary velocity even by selling $8T in assets.

I think it's pretty clear we'll be hanging out with Japan and the EU in disinflationary limbo for at least the next decade.

ChpBstrd

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Re: Is anyone worried about all the money printing?
« Reply #23 on: February 22, 2021, 01:33:21 PM »
With all the continuing lockdowns, relief packages, and the new relief packages they are getting ready to sign, is anyone concerned about the massive amount of money printing and how the devaluation of the dollar might change your calculations??  Also, how do you hedge for that in your investments?  International? Metals?  Crypto? (Most of my stuff is in Vanguard, if that helps.)  I am concerned but I really don't know how to hedge against it.  Any advice or enlightening discussion would be greatly appreciated.  Thanks!

I worry more about the long term political stability of the US government and less about the money supply. I hedge by keeping 45% of my portfolio international, and nothing in bonds save for part of my EF in I-Bonds.

As to the 1970's, the 1970's was a period of time where workers could demand and receive more pay. That isn't today, at least not yet.

To me, the two are nearly always intrinsically linked.  Political turmoil and financial instability go hand in hand.

I agree with this sentiment. The Federal Reserve and Treasury have proven their competency for decades. Our elected political leadership is the problem, which means the regular citizens are the problem. As long as we can have our chains yanked by media and social media rather than voting/acting in our self-interest, that will remain the case. We just killed hundreds of thousands of our own citizens because not wearing a mask was what all the cool kids were doing, and that's only the beginning. People are losing faith in democracy when what they should be doing is turning off their phones and observing who the competent people are.

lifeanon269

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Re: Is anyone worried about all the money printing?
« Reply #24 on: February 22, 2021, 01:38:15 PM »
Anyone worried that an increase in the supply of money will lead to a rapid decrease in the value of money needs to explain what happened between 2008 and 2019. Money supply through the roof and we barely avoided deflation by keeping the pedal on the metal with QE, record low interest rates, and historically low taxes - all leading to skyrocketing government deficits. We tried to cook up some inflation and barely got 2%, sometimes.

The reason why there wasn't inflation with all the QE that took place following the 2008 recession was because almost all of the QE was to help recapitalize banks that were running extremely low on reserves because they were so over-leveraged. So even though there was a ton of QE that took place, most of that money didn't actually end up in the economy (and therefore no inflation of the price of goods). This was very different than what is taking place currently.

Read this article for a good breakdown of "money printing":

https://www.lynalden.com/money-printing/

---
"However, banks were bailed out via QE and the Troubled Asset Relief Program. It was a top-down, anti-deflationary bank industry bailout, but not a bottom-up, pro-inflationary real economy bailout. TARP boosted bank solvency, and QE boosted bank liquidity."

"This, however, didnít result in more money chasing fewer goods and services, and therefore wasnít particularly inflationary for every prices. The money remained mostly internal to the banking system, at higher reserve levels. Broad money supply didnít increase rapidly."
---
« Last Edit: February 22, 2021, 01:54:14 PM by lifeanon269 »

PDXTabs

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Re: Is anyone worried about all the money printing?
« Reply #25 on: February 22, 2021, 02:14:22 PM »
---
"However, banks were bailed out via QE and the Troubled Asset Relief Program. It was a top-down, anti-deflationary bank industry bailout, but not a bottom-up, pro-inflationary real economy bailout. TARP boosted bank solvency, and QE boosted bank liquidity."

"This, however, didnít result in more money chasing fewer goods and services, and therefore wasnít particularly inflationary for every prices. The money remained mostly internal to the banking system, at higher reserve levels. Broad money supply didnít increase rapidly."
---

This part is important. You need the money/goods teeter-totter to tilt the wrong way to see runaway inflation. In terms of consumer goods we haven't seen that in my adult life and I don't particularly worry about it now. Though some of the supply chain problems that we have seen during the pandemic are actually pushing on the other side of this teeter-totter.

Telecaster

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Re: Is anyone worried about all the money printing?
« Reply #26 on: February 22, 2021, 02:37:59 PM »
By some measures, the money supply didn't increase a whole lot back during the Great Recession.  The is reason while the Fed creates money out of thin are, that amount is dwarfed by the amount of money private banks create.   When banks stopped lending, they also stopped creating money.

Link here:

http://www.centerforfinancialstability.org/amfm_data.php#thumb

effigy98

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Re: Is anyone worried about all the money printing?
« Reply #27 on: February 23, 2021, 04:43:32 PM »
Why worry? Just take advantage of it. Buy Bitcoin, Commodities, real estate, some stocks, etc with very cheap debt. That debt will be inflated away and easily paid off via your massively inflated value of assets. People who did this in the Weimar Republic got pretty rich with very little effort. I'm able to get money at 2.5%ish all over the place... There is no way the government is going to allow deflation, they have made this clear and will fight against it until the system collapses. If it collapses, you have tons of assets! Win Win!
« Last Edit: February 23, 2021, 04:47:13 PM by effigy98 »

hodedofome

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Re: Is anyone worried about all the money printing?
« Reply #28 on: February 23, 2021, 09:46:16 PM »
The permanent portfolio was created after the 70s, Iíd youíre really that worried about it.

chuckster

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Re: Is anyone worried about all the money printing?
« Reply #29 on: February 23, 2021, 10:18:32 PM »
I'm thinking of starting to believe the conspiracy theory that the US government, along with other western nations, have started on a 30-plus-year transition into Modern Monetary Theory (MMT). We could be 15 years or so along. Inflation could be manageable if proper controls in other areas are used.