Washington, DC – December 13: US Federal Council President Jerome Powell speaks during a press conference at the Federal Reserve on December 13, 2023 in Washington, DC. Federal Reserve announced today that interest rates will remain unchanged. (Photo by Win McNamee/Getty Images)
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The difference between what economists believe and what is true is the Pacific Ocean huge. Think of the popular view that Federal Reserve, paying banks to get stocks at the Central Bank, contains inflation. Where to start?
First, inflation is one thing and only one thing: a shrinkage of the medium exchange that is circulating to exchange for fewer and fewer market goods. In our case, inflation is a dollar shrinkage. Apart from the fact that the value of the dollar is not, nor has it ever been part of the Fed policy portfolio.
What about reserves? What about this? If we ignore that lending has nothing to do with inflation to start, what wasted thinking.
This is due to the fact that credit is produced, not available or managed by central banks. Individuals, banks and governments lend money so they don’t look with love, but for what they can exchange. This is just a comment that credit is a result of production, nothing else.
Economists attribute an inflationary quality to lending that implies striking stupidity. Really, which person, business or government will take on debt just to take over? Note the Tock, note the Tock.
The answer to the above is what is again true: Credit is produced, which means that lending increases in parallel with production. Looking forward and taking into account emergency production waiting as AI and other job savings make people make people superhuman As for their ability to produce endless abundance, the availability of credit today will be just a small fraction of what is tomorrow.
Stop and think about what that means. As the availability of credit availability will be a “cheap revolution” (rich Karlgaard of Tower A long time ago, the term was created, the term, or both) that will make today strictly appear from the comparison. Translated, the safest sign of economic growth decreases prices, not the increase.
It is important to remember when we are once again considering the popular (and unfounded) view of economists that the Fed contains prices by paying banks for the right to theoretically violate the money assigned to them. It is implied in such a sense is the opposite of what is true, that lending is inflationary, because loans with economic growth associates allegedly pushing prices as prosperous people to buy and buy and buy. Let’s refer to the latter as a fallacy over the fallacy above the fallacy.
Demand is a result of production, nothing else. Translated, the more people produce the more they require. To imagine that demand can overcome the supply is to misunderstand how people demand in the first place.
Secondly, what we do not spend as our production increases as a capital for the innovators to match, on the way to even more production of myriad goods and services at prices that continue to decline. For the time being, hundreds of billions find their way to AI and other job saving advances that will again push everyone’s costs, while driving buyers to all the new desires and needs they never knew they had.
Nevertheless, economists who have passed through fallacy that are simply dying to distance themselves are focused on the Fed who pay interest on banks to lend less? Forget that the latter has nothing to do with inflation, he forgets that banks are rather than a shrinking part of the increasing quantities of worldwide faith, and just remember that a bank that lends the Fed will have no effect on the growth of US economy growth, the growth of its itself.
Economists are more effective in being irrelevant. Their focus on interest in stocks explains why.
