Hacker News new | ask | show | jobs
by scantis 1877 days ago
This problem is world wide. Nearly all countries print more money, while the global economy reduced it's output by 10% on average.

This is why we can not see the effect yet, because everything is still somehow in a balance.

Around 2008 there was about 4 times more money than things you can buy, now we approach 20 times and over. So this is not a new problem.

This money is stored somewhere and not part of the economy, so this usually does not matter, but the implications are crazy. If you look at Tesla for example they are worth more then the next 6 biggest car companies combined, while only producing the tiniest amount of product and having very little people employed. This will continue and continue, over years people assumed it would crash and have been wrong.

This makes no sense to me, but having more money and less stuff is actually a booming economy in the making. The problem is, the money can not be used right now. The world economy is stalling.

But give the money just a place to be stored or a product worth buying and boom its value goes through the roof. Housing, rare materials and companies like tesla will suck up money like crazy for now... Other then that nothing much will happen for now.

1 comments

>> Around 2008 there was about 4 times more money than things you can buy, now we approach 20 times and over. So this is not a new problem.

This IS a new problem that is 5 times bigger that 2008 crash. Probably much worse due the catastrophic chain effects it will cause.

I'm not too certain, I am a scientist not a business suit, so I could easily be wrong... but ... From my point of view the crisis of 2008 came by calling the bet and seeing it wasn't backed up by cash or collateral. This was circumvented by increasing the cash flow and saving the banks at that time. In 2009 the US gave stimulus pack to restart the economy, since only saving the banks didn't help anyone else.

So the resession was healed by providing more moving money and everything bounced back.

This is what we see again now.

So the system is actually holding up because the amount of money is increased. This is not the symptom, but the cure.

This way everything can go on as it is, but you are right, there can be more effects. Although I'm not sure which.

If the cash flow goes away so do all products and people starve... This is avoided by printing more cash. At least that is the theory and it seems to hold, for now...

Again I could be wrong on this.