| >Notice, when the us had deep music-gonna-stop level problems in its economy it prints a shit-ton of dollars. Which other country in the world can do this? Nobody. And it will stay this way until someone has a navy as powerful as the US. The Eurozone can do so as well. Actually, it must do so to prevent the collapse of the euro. It's the same with the USD, foreign nations keep "stealing" USD and take them out of the US and therefore the US must replace the lost USD just to stay still. Also, the fact that no money is being printed is one of the biggest problems. Yes, you can increase the money supply without printing. For every USD you create, you also create an obligation to return it which is called debt. When the newly created USD are allocated to otherwise idle resources you may unlock value equivalent or higher than the debt you took on. The excess value you have created in the process is called economic growth. It turns out, fiat creation is highly deflationary and deflationary forces from other sources are extremely high as well. However, debt is inaccessible to the vast majority of the population. I personally still get 4% interest rates on private loans. The borrowed money never ends up in the real economy indicated by low inflation rates. We are basically experiencing the great depression again but to a milder degree, therefore we should do our best to prevent it from becoming a problem in the first place. The fact that the US hit inflation goals because of a pandemic is pathetic. What if they were not blessed with a natural disaster that spurred politicians to act (it wasn't enough to get trump to act)? Hitting inflation goals and moderate interest rates quickly is absolutely necessary to keep the economy stable. With every year of low interest and low inflation the imbalance keeps growing but the correction will happen in a flash, therefore we must ensure that any imbalance is as small as possible before we run into the crash. It's like extinguishing wild fires as soon as they happen while the fire is still under control. At some point you can no longer contain the fire but the consequences have become unbearable. It's better to crash small today, than crash big tomorrow. Unfortunately, today is many years too late. |