[graphtradr]

Ultimately, we basically wallpapered over massive deflation with money printing in 2020.

What is interesting to me given what we have done is how much inflation we still don't have. Right now, the break even inflation rates were still higher in 2008 and 2005.

Of course we were always going to have a surge in the rate of change compared to a year ago when people were are on lockdown.

[WanderPanda]

I think the plan has worked out so far: Prevent asset price deflation (to not trigger too many margin calls) by creating artificial asset price inflation. For now CPI seems to be more or less unaffected which can be seen as a success from the "kicking the can down the road" point of view. I think this comment by Christine Lagarde: "We Should Be Happier to Have a Job Than to Have Our Savings Protected" nails it. Its choosing stability over efficiency to prevent the unrest of the masses.

[axaxs]

There was no massive deflation in 2020. Prices started rising because of 'covid shutdowns', and house prices started upping due to lack of inventory.

[HPsquared]

There has definitely been an increase in the money supply, for example see this chart of the M2:

https://fred.stlouisfed.org/series/M2SL

"Velocity" as it's called dropped in 2020, but once trading picks up again what happens to all those dollars?

Edit: here's the M1, even more striking: https://fred.stlouisfed.org/series/M1SL

[dragonwriter]

> "Velocity" as it's called dropped in 2020, but once trading picks up again what happens to all those dollars?

They go back where they came from.

The Fed giveth, the Fed taketh away.

When deflation and unemployment are the concerns, you get the gas pedal pushed and easy money policies. When inflation is a concern instead, they hit the breal and you get tight money policies.

[throw0101a]

The surge in M1 was mostly because of an accounting change:

* https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec...

(M2 includes M1, IIRC.)

[quickthrowman]

This poster is correct, I’m not sure why the post is gray. The way M1 is calculated changed last year, read the linked article for proof.

[graphtradr]

No one is disputing that the money supply has increased dramatically.

[bufferoverflow]

Deflation? Are we living in the same universe? The prices have been going up and up and up.

You can probably cherry-pick a few items that went down in price, but the overall trend is crystal clear.