These are the basic questions economists should have asked to spare themselves from bankruptcy:
Q: How can we print so much money without (hyper)inflation?
There are two reasons why Money Printing (aka. QE) never led to hyperinflation, as it did in the Weimar Republic and to a lesser extent the 1970s 'Stagflation':
The first reason of course is mass Third World outsourcing, as depicted by capacity utilization below. Today's output gap is chasmic, and under the current "free trade" paradigm it will remain chasmic. There is an unending supply of cheap Third World labour to tap into:
DEBT IS DEFLATION
Secondly, unlike those other examples of hyperinflation, today's debt levels are several orders of magnitude higher today than at any time in human history. Debt is merely future consumption pulled forward to the present. Therefore when the future rolls around to 'now', those massive debts from prior consumption, have to be serviced at a cost - the cost is the inability to indefinitely maintain the prior level of spending. Or, we could just say "we borrowed too much money, and can't pay it back", which is what anyone with an ounce of commonsense would say i.e. anyone who doesn't have a Harvard PhD in Economics. Unfortunately, the Supply Side Ponzinomic "indefinite growth" paradigm doesn't work in the real world.
Deflation Visualized via The Velocity of Money:
*New* money is not going into the real economy because the credit cards are maxed out in every direction:
There was of course one type of inflation that did result:
NYSE Margin Debt: w/S&P
The most obvious question of all during this era, was scarcely asked by anybody:
Why would Third World nations accept worthless printed money in exchange for their products and hard labour? Is it because they thought we would ever pay back our Ponzi-financed IOUs? Or is it because they like owning worthless money that goes down in value everyday?
No. Of course not. That's an asinine assumption.
It's because they value what we had: jobs, technology and industries.
In the minds of a corporatized Idiocracy, jobs and industries were merely "details" to be outsourced. Everyone knows that printed money has more value than a factory.
Economist: Someone who knows the cost of everything, and the value of nothing.
In the minds of a corporatized Idiocracy, jobs and industries were merely "details" to be outsourced. Everyone knows that printed money has more value than a factory.
Economist: Someone who knows the cost of everything, and the value of nothing.
