The Money Printer Will Lead to Our Demise

Coming straight from the Federal Reserve, we started this period with around 4 trillion US Dollars in the system. One year later, that number is at 6.7 trillion dollars. Meaning that over 40% of all US dollars were printed in just the last 12 months. And from the looks of it, no one seems to be in a rush to slow things down. And strangely enough, we haven’t seen much inflation for everyday goods like gas and food? Prices definitely haven’t gone up anywhere near 40%?. Where’s the inflation? The reason why we haven’t seen inflation is because the amount of money being printed is only one of the factors that contributes to inflation

To get inflation, here’s everything you need:

1. Industrial Output: how much “stuff” an economy makes

2. Employment

Too much employment leads to employers fighting over workers, which leads to higher wages, which leads to higher prices

3. The Money Supply: the main topic of this video and probably the easiest to understand

More money when an economy is producing the same amount or less stuff equals higher prices

And 4. If money is exchanging hands, and if so, how fast is it exchanging hands, or the Velocity of Money

And in our case right now, the money supply has shot up a ridiculous amount, but the other factors have been keeping inflation down Industrial Output: It’s been down from businesses not being able to operate, which means less stuff. But there’s also less demand from you and I to buy those things.

Employment has also definitely taken a hit. And with less employment comes lower wages, which means lower prices. Not inflation.

And the Velocity of Money. It’s pretty slow for everyone with all the uncertainty in the air. People don’t want to spend a lot of money right now if they don’t know if they’re gonna be able to find a job or keep their job

But you know what they are gonna spend it on? The things that only go up! Like Tesla stock, every other stock, real estate, and Bitcoin! But instead of calling it inflation, we call it the stock market rally, the real estate boom, crypto’s time to shine or the great crypto bubble depending on who you ask.

Should the money printer keep going brr? Can the money printer keep going brrr?

Interview by Jake Tran.