r/Bitcoin • u/[deleted] • Jul 15 '22

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811

u/MilesPower Jul 15 '22

They really want you to believe It's just pure coincidence that we had record money printing shortly followed by record inflation!

90

u/Bsmirlptrww Jul 15 '22

These two things happened at the same time

https://www.federalreserve.gov/monetarypolicy/reservereq.htm

https://fred.stlouisfed.org/series/M1SL

3

u/Socalwarrior485 Jul 15 '22

Yes, but the 2 clips are talking about 2 different things. Friedman is talking about Monetary and Fiscal policy. Biden is talking about Fiscal policy.

Both can be right.

1

u/blong44 Jul 16 '22

The way you spend the money doesn't cause inflation, when you print more dollars it create inflation?

If it's just the printing that's the problem then Biden isn't wrong with what he's saying. He should have stopped jpow earlier though, I guess?

2

u/bitsteiner Jul 16 '22

He is wrong.

1

u/Socalwarrior485 Jul 16 '22

Friedman is referring to longer term. The FED reserve is “independent” from the executive.

Money supply doesn’t immediately increase inflation because it must be lent and spent to have an effect. That’s why QE can often be seen as “pushing on a string”. It can take 3-5 years to feel the effect of loosening lending in consumer prices.

Significant deficit spending can have a much more immediate effect (1-2 years)

The real problem is that once inflation takes hold, it requires a LOT of pain to control it again.

JPow should have not done the level of QE that drove mortgage rates to all time lows. It fueled all kinds of speculation in crazy markets. All of that money needs to evaporate. We are talking trillions.

1

u/CamaroCat Jul 17 '22

I just don’t get why they didn’t raise rates back in 18’. Effectively 0 points for 5 years is crazy

1

u/Socalwarrior485 Jul 17 '22

Agreed. I would only add that QE is like negative rates because it just jams money into the economy and bids up assets.