| >2. Ask anybody on the street if they demand more money and 100% will say yes. Why doesn't the Fed increase the money supply for the random Joe on the street, but does so to cover unsustainable liquidity commitments made by banks? The unsettling answer is that you would lose your job if they didn't do that and I don't mean because the chaos a bank collapse causes. No, I just mean that the money in circulation would dry up so fast, your employer won't have any money to pay you. >4. A mockery of a feudal economy in a way. And this is where we are heading. It's a feudal economy from the start, it's just that early on, most of the money is circulating in the hands of workers and once it stops it has to be borrowed from those that take it out of circulation. >5. We can prove this one as being false. Money neutrality has never been demonstrated in the long term. In fact most forms of money ended up guided by politics, hyper-inflated the supply, was banned, price-controlled or otherwise collapsed due to some inevitable populist political decision. Thanks, you are absolutely right. The problem, however, aren't the politicians, they have inherited a system designed to collapse on its own. It shouldn't be possible to take money out of circulation. Hyperinflation is effectively a problem of forced indebtedness. If the politicians had the option of refusing debt they would have taken it a long time ago. As I said before, cash guarantees you a 0% yield on your investment, therefore money can be taken out of circulation with no loss to yourself but huge losses to people who are dependent on circulating money. They (including politicians) need the circulating money now, so they accept loan conditions that are not compatible with current market conditions. The system will collapse one day, so why not let it collapse a few years later? It's only logical. Meanwhile anyone who wants interest rates to go up wants the system to collapse earlier than necessary. >It's pretty funny how the Fed keeps telling us they look long term, inflation is transitory and markets will work it out in a few years without intervening. But when the repo market crashed they didn't wait "for the market to work itself out", they rewrote their whole rulebook and launched support facilities the same day. As I already said, that money too will be taken out of circulation one day. >By now it's clear they are making it up as they go and they are just dominating the system with increasingly excessive interventions into a self-exciting oscillation. If you think the Fed is intervening, why are you not complaining about the people taking money out of circulation that force the Fed to do stupid things? Why does that not count as massive market intervention? If you had a 6% annual tax on cash the interest rate would have dropped to 0% in 2000 and the money supply wouldn't have to grow as much. |
Printing money doesn't fix any of these issues, the only thing money printing does is force the money into the overcrowded money sinks (AAPL) and scams (NFTs). And I am willing to argue this makes the problem worse, because talent is now wasted into supporting scams or the best talent is retiring on passive income from money printing instead of finding new ways to convince investors and consumers to spend productively.