We Are Heading for the Worst Inflation Risk in 40 Years: Summers
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- Опубліковано 25 лют 2021
- Feb.26 -- Former U.S. Treasury Secretary Lawrence H. Summers, a Wall Street Week contributor, cautions against dismissing concerns that the economy could overheat. He says there is tension between Federal Reserve Chairman Powell's statements between keeping rates low and maintaining price stability. He joins David Westin on "Bloomberg Wall Street Week."
This is the most gigantic bubble ever in history. When it pops, we pop.
We lived through the worst bubble in the Great Recession, but yes, the market is due for a correction. It is entirely unclear when that will be though.
Nonsense, everyone always says this and it never happens. There are crises and corrections and then up, up, up we go again.
@@JeffreyGillespie the stimulus package helps drive the stock and crypto market up but for how long? Eventually, people will be taking profit. When it does, consumers goods' prices goes up, and the market will crash.
I am seriously so impressed by so many of the comments on here... Like, actual real smart people who do their own homework.
I take it none of you are real popular at family gatherings?
@@flipacoin3593 sadly betting for inflation in markets is a widowmaker bet on wallstreet...just not a profitable bet to make, but always good to be prepared for it in the event it happens with some gold and silver!
Buy the dip should become short into strength.
LOL or with friends.
I walked out of the last one. Didn't say goodby to any of em. Happy 80th birthday gramps. You should have called at least once in the last 25 years.
I'm sure I'm not popular...
I think the great majority of informed and intelligent people out there would acknowledge that this is all going to end very badly. It's not a matter of if but when. Stay tuned.
Endless liquidity, 0 interest rates, print to infinity what could go wrong.
@@WW-to5rc right
Agree, it's a problem of timing, not expectation.
Buy physical gold and silver.
That is not at all true because right now in the USA there are 100,000,000 who are below the age of 26. 100,000,000 were born in the USA 1996 to 2020. Yet there are only 33,000,000 who are 26 to 50 years old. Inflation will NOT be the problem. The problems are thstvwevfon't have trained and experienced replacements for the 40,000,000 reaching retirement age by 2035, and we are going to have 50,000,000 u skilled labor looking for work to support themselves without job skills.
USA only has a 25% college graduation rate and another 25% who try college but don't finish. Granted many if those get 2 year associate degrees or specialty certificates. That still leaves 50% of adults without job skills. If 40% become stay at home mothers, that gives some hope if taking up some slack, but many if the women affluent enough to have that lifestyle are university degreed.
The 'fat' in the USA economy has NIT beeñ getting to those having difficulty just surviving such as veterans and young people coming out of foster care with no place to go. There is NOTHING being done to rescue all the people living in their used vehicles.
Business people look at all the money, and since it is not going directly into their bank accounts they assume it is a problem.
Money going into the hands of working families is NOT a problem. The biggest hunk goes to housing. Most of the rest goes for food, utilities, and car payments.
Business people prefer families to survive on DEBT because then the working families are easier to control. Families who have extra also have the option of seeking a better employer. Extra money in the system increases employee turn over. That is the business inconvenience!
There won’t be a collision between the fiscal authorities and the central bank. For the central bank controlling inflation is not the highest policy goal any more. The US government cannot afford to pay market interest rates on its debts - it’s now the job of the Federal Reserve to manage the burden of government debt while maximizing growth and employment. Inflation is at best a secondary or tertiary concern. They will bark a lot but they won’t bite.
I almost never comment on UA-cam content, ever, but, yes, this. Hit the nail on the head. I think the vast majority of investment advisors out there today don't understand interest rates at all. Just parrot party lines about sector rotation, etc.
I say to you, Godspeed, good sir.
Inflation will wipe out nominal debt, so continuing your thought this is a clear motivation to let inflation run. But contain it to asset classes, and avoid everyday good inflation to minimise social disruption
I agree.
I think what he meant by collision is, rent and price controls. And he is right, that won't end well. There will be shortages of everything. There will be even less new construction of housing. This will lead to black market corruption, and people living in hotels. This is already happening in some places. The job market is already screwed by the "woke" police,, and will be worse. I am not sure what massive inflation will do to compound matters. Probably just force owners into producing things that don't require human input.
Spot on
This guy said that this will be within a year the most serious inflation problem we have seen in 40 years. Here I sit typing this one year after this video was posted and sure enough the news reports today nation wide that this in fact is the worst inflation we have seen in 40 years.
Most poor people don't know, the stimulus money will eventually go back to the rich. Don't be fooled, you are actually getting robbed.
agreed
The Biggest Wealth Transfer in History
As a rich person can confirm this
@Arwyn Because the policy makers are the people from this level. Do you think they will create something to hurt themselves?
When is it ever any different?
Why don’t they let people talk in these shows??? An intelligent person comes in, let them finish their thought.
mainstream media are there not to inform, they're there to shape public opinion, to mislead, entertain. Americans are less informed than Europeans.
@@willengel2458 agree. Media working with the government is slowly lowering our quality of life... And we let it happen.
Did you actually watch this? Summers spoke for virtually the whole video, except when the interviewer asked questions, which Summers was given the time to answer. He did his job.
@@Dan0TheMano operation mockingbird.
“stimulus is good but only for the rich. buying a second Jet doesn’t create inflation.”
^
Buy silver Don Gomez take your part.
My Airbnb are and have been booked solid since December
@@mikewilliams4947 where?
@@pearlperlitavenegas2023 USVI. Tickets not exactly cheap. San Juan looks solid too. Tons of people out having a blast.
Hey Larry. I'm from the future. You were correct. Inflation is now at a record high.
Yawn.
US rich guys are complaining about stimulus for the poor, while forgetting that in 2008 the poor bailed out their pathetic asses?
all that champagne and cocaine bankers and traders love so much, is really useful to help forget the past...
This stimulus and government spending sounds good for the poorer people but it is really going to hurt them the most when the cost of everything goes up.
@@katarinaweaver2661 well, increase taxation on rich.
Return the favor.
inflation is most destructive on the poorest of society
This guy is the architect of the 2008 crash because of his wall street coddling policies under Clinton.
This is the same genius who advocated to get rid of glass steagall act.
Yeah, he's a friggin idiot who widened the gap between the rich and poor and caused the economic collapse of 2008 due to repeal of the glass steagall act.
He also argued that Russia needed laissez faire capitalism in the early 90's.
How else were they going to transfer wealth to the top?
From the conversation here I get that he had a lot of 200 IQ moments when he was in office.
And ignored the first signs of the mortgage crisis.
I am not sure where Summers is getting his INFO or where he has been for the last 10 years ... but, I have personally watched things I by on a near daily basis double in cost BEFORE the pandemic ... All the while wages staying stagnate and in some cases like rideshare going down . . .
Yeah, Summers should watch more youtube. Lol
I think they're anticipating prices to even out eventually, and the current "inflation" is just a spike and not a permanent change.
@Garrus Vakarian I agree with the sentiment, but to do that now would cause a massive increase in rates and probable liquidity issues for banks, in terms of selling loans to government agencies to continue to have money to lend. With debt so high, and housing prices that were priced to meet demand and the new "affordability" based on super low mortgage rates, equity would be wiped out, thereby reducing credit and confidence. Basically our economy would crash. I don't know how to back track from here without immense suffering.
@@trevorciovacco8176 Yes that is the view of the fed but what they aren’t telling you is that what’s going to stop the spike in inflation is going to be an equally offset in the equity markets of deflation, essentially a propionate drop in all asset classes to equilibrium at which point inflation will of course stop spiking due to a weak market. It doesn’t just stop spiking on it own, it has to be offset somewhere else like two sides of an equation ala the stock market. So you will see yields grind higher while stocks grinding proportionately lower till we hit equilibrium
@@leapinglegend3164 Possibly. I don't know if there's a 1:1 correlation though. The S&P could be 4500 as long as bread isn't $10 a loaf. However, I agree that higher yields siphon money out of the stock market.
All that's been happening since 2000 is kicking of the can down the old country road.
Many people say this, and that eventually it won't work anymore. But no one seems able to articulate why exactly we can't keep kicking it forever
@@dudewaldo4 Because eventually we will have hyperinflation. And you'll say, "well it hasn't happened yet so why worry about it". Because these things take time it's not an overnight event, it's a process.
@@dudewaldo4 the only thing that makes money money is belief in the money. The only way to o combat the coming inflation is to raise interest rates. When that happens, try paying interest on 30 trillion dollars. Maybe 40 trillion by the time Biden is done in 4 years.
The long depression of 1860 to 1890 prompted the gold rushes and went on for 30 years maybe there's another 10 years of can kicking ?.
@@dudewaldo4 Simple, lost of faith in the dollar
Wages will not follow. That means stagflation.
Right but that’s not new
@@caillouswagg101 it will be on the scale we're going to see.
Employers have convinced employees they dont deserve higher wages
@@marcuslosgreat4225 lol hmm the growth is not for employees that’s for tax purposes ..
it’s really the market and starting business that’s needed
@@marcuslosgreat4225 we will call it pimp game on the highest of levels ..
You mean “set ourselves up for inflation” that is so high that even the CPI reflects it?
Summers is crying. He was treasury secretary. His fed kept the interest rate at zero the whole time he was there. HYPOCRISY
Inflation was minimal during those times though.
@Arwyn I tried to give him the same benefit of the doubt while listening to him. I am a conservative. He gets a slight pass but I also would say. He and his buddies are the reason why there is so many problems in our economy. Obama and Summers started the big spending that got us here.
@@iamcedricpowell8051 The problems in our economy are undeniable but also incredibly not as bad as they could be, for what that's worth.
Stimulus is like trying to put a fire out in your kitchen by throwing a bucket of water on your entire house 🏠
American Economy = House of Cards
and I love it, the more fragile the better
Indeed
If we get inflation Jerome Powell should get the Nobel Prize in Economics for solving a problem that has existed for 40 years and no Western Economy has been able to overcome which is the Deflation Trap. We can't have inflation without low unemployment, with real unemployment at 9% its ridiculous to worry about inflation, the market is pricing in actual economic growth. Lawrence Summers needs an internship at McDonalds or Walmart to learn about the real economy.
Preaching 🙏
You can have high inflation with high unemployment, look at Turkey. Phillips curve was a model for the 50’ and 60’, it’s not reliable anymore.
Gas prices around me were $2.69 at the start of the month. Now they’re at $2.99. That’s a ~11% increase in a month. Food prices have gone up as well.
Inflation isn’t coming. It’s here.
Fun fact: food and energy prices are not factored into CPI calculations
exactly! The powers that be know.....things are already “imploding”!
Just getting started
Um, duh, texas froze, that's why your gas price went up. Way to pay attention.
Gas prices fluctuate like crazy. That’s a terrible example.
“Can they be wrong” LMFAO
Only in America you can have a stimulus package that has everything in it but what it was supposed to be designed for
the people.
American Government on display.
There's nothing the government can't make worse...
PolitiFact rated "Mostly True" a claim from conservative Stand for America that the bill contains unrelated projects. Examples cited in that fact check included a $1.5 million bridge connecting New York and Canada; a $100 million underground rail project in Silicon Valley; $480 million for Native American language preservation and maintenance; and $50 million in environmental justice grants.
Debt $28 trillion and climbing. America added more debt since 2008 than they did from 1784 to 2008. BIG PROBLEMS coming.
US hasn't had serious inflation despite QE cuz it benefits enormously from globalisation and dollar dominance.
Guess that depends on whether or not you believe that BLS / CPI is even remotely close to a reasonable or accurate measure of what real inflation actually is. You do understand that BLS has very significantly changed how CPI inflation is calculated now as opposed to how it was calculated in say 1990. And if you look at alternative inflation measures such as ShadowStats or The Chapwood Index they both indicate that CPI inflation is very significantly understated from what real inflation is. Both of them consistently calculate that real inflation is 3-5x higher than what CPI claims it is.
Exactly, the dollar being a reserve currency has greatly helped in controlling inflation on the USD
It’s only 3.6 roentgen the equivalent of a chest X-ray I’m told
Inflation? How can you see something thats not there?
Not good, not terrible
@@julians7613 you didn't see it because IT'S NOT THERE!!!
Just bail out Larry, and when he loses it, give him more. Tool.
How are countries like Germany paying 80 to 90 percent of people's wages instead of a whole lot of nothing and half measures we are forced to fight for but never get over here?
I believe Canada is also paying a lot to its citizens, amazing, How fo they do it? And everyone has health care as well.
Fed printed $40 BILLION in just 1 week through last Wednesday and bonds rates still went up!!!
Thats how you know the end is near
@David nope you should buy land where you can grow food.
It's very common for inflation to happen.
The rise in bond yield proves the consensus of the market. Reits didn't fall that much.
I lost $70,000 in income from the pandemic but givingme $1400 is risky? Why was the 17 trillion dollar tax cuts for corporations not risky?
Buy metal and crypto
He was spot on
Keynesian economics focuses on increasing aggregate demand. Aggregate demand is easy to increase. Just give people more money. You can print it. Overnight, sales will increase. But unfortunately, increasing supply takes time. It takes time to grow food, grow trees, expand businesses, start new businesses, train employees, build factories, and so on. So, the consequence is inflation; lots of it.
In the 19th century the focus was on increasing supplying aggregate supply. There was 76% inflation during the Civil War because Lincoln printed money to finance the war. It took 14 years to get the prices down to the pre war level. It was done by keeping the money supply constant and then allowing the economy to expand. It takes time to eliminate inflation without causing a recession of depression. The 19th century was a century, in general, of price deflation, and a higher standard of living as the economy expanded. The money supply was kept relatively constant using a gold standard. But today, politicians are not patient. They want quick results. So we print money to boast GDP but inflation is the consequence. Boom and then bust or even worse, a period of stagflation.
Peter de Luca: Economist
I love how the fed chair always tells you not to worry lol, like they rule the world..
LOL @ them cutting him off at the end
they didn't seem to like what he said lol
When was the last time this guy got anything right???
When he agreed to resign from Harvard? 😂
Not sure he ever got anything right He’s perfect for Bloomberg
Well, turns out he was right this time.
"TOO BIG TO FALL"
Summers commenting on the gap between reality and economic policy is quite rich, pun intended. Mr QETARP is worried about pandemic stimulus.
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Why do they need another 1.9T stimulus bill when the treasury general account is sitting at like 1.6T ?
I live in south and central america..there is no Free money being handed out here. Nothing has collapsed,,yet.. USA Americans just spend and buy what other nations produce...
The USA has over 10% unemployment. There needs to be a massive demand increase so businesses will hire people to help meet the demand. Given unemployed people dont have much in the way of disposable income, the only way to give them such is through government stimulus checks.
@Burt Gummer The USA produces many of the things it cant live without. You cant make the highways and infrastructure better without spending the money to make it that way and saving the money wont fix things.
That's why we will have hyperinflation, other countries like China will not fall into this trap anymore.
We’ve been living in an inflation for 40 years !
@Adele K Why? Say 50, so since 1970. Well, from 1950-1970 S&p500 index rose over quadruple, what's to stop someone from saying back in 1970 that we've been living in inflation for past 20? What makes the last 50 special from the overall life of the economy or stock market?
theres no need to print new money, there is enough already, its just that they are very unevenly distributed, so transfer the already existing wealth from 1% to the 99%, so everybody has some wealth as opposed to some having none at all and some having enough to last a 100 lifetimes. the riches if anything should be most interested in this because if you keep exaggerating the inequality you'll get high crime rates and class warfare
Inflation in housing, property taxes, commodity prices. But most people don't have money in their bank accounts, no buying power, buying using home equity is not an economy. Unemployment high i see deflation down the road. Look at cars. They cost the same as in 2015 with much more options. Furniture is so cheap. Goods in Walmart very affordable. Food still affordable. But housing high in big city not in a small town in Alabama or Kansas. But deflation will set in should housing fail.
The numbers he put are hard:
- 3% gdp gap, getting 9% worth of gdp fiscal stimulus
- 7-8% net private saving rate, dealing with 18% gdp budget deficit
- 2 trillion dollar savings overhead
- 14% of gdp (2.8 trillion dollars) total fiscal stimulus
The economy of US is going to get hit hard with inflation and fundamentals collapse
“Worst inflation risk in 40 years” but “it’s needed”. What? Why is it needed? How does it help to give me a check if all of my other cash is now devalued. All this does is create bubbles and trick people into voting in the same politicians🙄
helicopter money is great
IF someone gets check, I better see my check
The big problem is the everyday American consumer circulates the majority of cash & pays the vast majority of taxes, but 50 years of uber liberal economics have plundered the middleclass. Middleclass net worth has plummeted 35% over said 50 years. It's been a slow, assisted economic suicide.
It is better to burst the bubble to exchange long term development.
Hey Larry,
What is the value of Brooksley Born thoughts now?
I wonder if there is a solution in creating a lawful decentralized free market utility technology(s)?
The bigger question is, what can we as individuals do about it to protect ourselves and our families?
Provide for yourself. Home teach your kids and grand kids pesticide free gardening and grow your own herbal holistic medication. This is the best thing you can do.
this stimulus is going to be 3x the yearly defence spending
Which says more about our military spending than anything else.
Holy cow do we waste too much on defense!
It's not defence, it's offence. Kill kill kill..destroy destroy destroy..hate hate hate..USA of Hate.
CCMP is Nasdaq Composite? I thought it's IXIC. Why the two tickers?
WOW I actually agreed with LS...except for tax increases at the end. That was the old LS
Excellent information. I never miss a Summers interview.
If you make wise investments inflation will not harm you over the long term. Conversely if you do not invest in anything inflation will in fact hurt you. Inflation will start happening soon. Economic growth will happen too regardless of borrowing power perceptions. Now loop back to sentence 1.
Wow so basically 2+2= 4. Wise words buddy
Big problems ahead...
The worst of two world's. Very poor leadership with inflation like we have not seen in years.
Awesome
Problem is people are not working and money is being printed... when people go back to work it will be ok
As long as enough dollars are printed we'll be okay.
@@creatineenjoyer7345 As inflation goes up then it's not worth the time to be productive.
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I did invest with her and I made huge profits
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beats the 40 years of deflation we've been having. but i would bet my money on mild inflation. bond yields and the velocity of money have been going down in basically a straight line since reagan. inequality is far more deflationary especially since there's only so much rich people can buy
What has gone down in price in 40 years? Average prices for homes, automobiles and everything else I usually buy has more than doubled in price except for electronics.
Hard tightening is necessary
Close most overseas military bases and the military budget by 80%.
Cry havoc! Let loose the dogs of war
Austerity always fails. Tax the rich.
Will never happen. Surefire way to lose the next election.
Sure fire makes a nice tactical light.
PSLV
Physical
the stock market is a casino and has nothing to do with the real economy
stock market can't be a casino. If it would be, you would have a negative expected long term return...
@@gotnoname3956 In Casino operations, the House always wins. Wall Street is the House and they always win because even if they lose, taxpayers will have to bail them out. Therefore, Wall Street & Corporate Amerika are a casino.
The stock market is balkanized. There's a solid market where prices are too high. There's a casino where prices are many multiples beyond insane. There are other small markets in there. But maybe the real story is the rapidly increasing percentage of households investing in the market: this changes the fundamentals.
@@id10t98 ? I don't care about bailouts. I only care about the return of my own portfolio. What you're describing refers not to the stock market but to the financial system.
@@conservativemovement Doesn't change the long term expected return of stocks, which is positive.
They have no choice we are playing a game of monopoly. It’s a balance of keeping the game going or catastrophe. Nobody is gonna hold on to these valuations if they don’t keep pumping that juice.
👎 Same old baloney from Larry "I'm the smartest guy in this phone booth" Summers! Failed.
Umm..I believe it’s “taper” tantrum
Wall Street be like, "WAAAAHHHH! They only put a gallon of tequila in the punch bowl!"
We are heading for another BLACK THURSDAY of 1929..... wake up people
One month later, most tech stocks dropped about 20%!
Why don't do the stimulus by stages , for instance stage 1 let say USD 800 billion & follows by stage 2 for another USD 600 billion and stage 3 about USD 500 billion. Depends on health of the economy , stage 2 or 3 may not be required
We've wasted enough capital and taxpayers money into the market, corporations, etc. somehow we always find a way to justify that money, so now is time to put some money in the pockets of the people contributing to those fund's. I'm sure will find a way to justify and if taxing the higher earners is the answer then do so, I promise they won't go anywhere.
Delusional, the higher earners already pay most of the tax, so tax them more and they will leave. There’s nothing special about the US anymore, it’s easy to have a good life elsewhere in the world, and even easier if rich and mobile. Take the existing taxes and use them much more efficiently - don’t jump to trying to steal more money from people as the magic solution, won’t work. I have many rich friends and they’re all getting prepared to leave, if taxes make any meaningful jump higher. People are sick and tired of being abused and scapegoated for being successful.
@@EnderViBrittania Good they can leave and the rest of us who make plenty of money will stay and continue paying a fair tax, expanding and innovating since that's what we do and no rich friend will share their financials with anyone lol we don't pay as much taxes as you think, there's credits, write offs and many other tools you can use both for personal income and business profits 😂 good try though. Going back to a 27% which we were before is not gonna kill anyone with a decent wallet, what's gonna hurt everyone is debt, all these zombie companies and as you kindly stated " rich people " is not Their money they put at stake is the government's and if they're smart they'll be doing that. Oh and please leave, get rid of your U.S. passport, it will open the other for others coming up, capitalism is a chain that's supposed to keep moving not stopping and supplying endless amounts of loans and credits to corporations and people with wealthy pockets. You got bankruptcy court for that! Oh btw no one here will leave the biggest spending market in the world, China still behind when it comes to that and if we balance thing's right, will be coming for their money too 🙃😊
@@EnderViBrittania The highest earners do not pay the most taxes. You are ignore social security taxes, medicare taxes, gasoline taxes, utility taxes, government fees, and local taxes like property taxes, state taxes, and all the hidden taxes like import taxes.
@@raybod1775 Probably referring to federal income taxes. Not state and local excise and sales tax. Bottom half of America pays a net of zero income tax and likely gets a refund/credit beyond what they paid in. By percentage, big corps are always the biggest local ad valorem tax payers in every municipality as well, which provide jobs, attract and support other businesses and so on. There contributions are beyond there flaws. Should they be held accountable when violating people, sure. But you literally can't hurt them or make them pay more without screwing your own economic interest as long as they have an alternative tax environment to flee to.
@@raybod1775 You need to factor in the tax refund and other free money benefits that people get. After including it, then the rich pay most of the tax.
We should take Larry seriously. He's the point man on the u.s. economy.
At the end of the day Summers is embedded in the establishment and can't see how rotten the timbers are.
Pulled out with without warning???? Did he even listen to the talk, he specifically said the Fed will let us know way in advance before they start raising rates.
Generally I am concerned by the time the Fed knows it the boulder will already rolling down the hill. How long can they really forewarn before kicking on the brake?
MINDMED!!!!
i love that stock!!
Ehh...
It's not just the "free" stimulus check, which does contribute to inflation, but Corporations have been allowed to issue bonds on top of having publicly held stock, which effectively prints money for that corporation to the tune of "whatever that company is being valued at".
The New York equities markets crashed back in September of 2019, and, as far as i know, has been recieving a 1 billion dollar a day subsidy from the Fed. Main stream news outlets aren't reporting on it, so i think that might still be happening and no one knows why it happened.
It's not a fair comparison between the gap of the GDP being 3% (lost), and stimulus being 9% of GDP (invest). You certainly shouldn't be expecting you invest/stimulate 1T and in one year you make 1T back, where do you find that kind of business?
Hope inflation skyrockets to like 10%. Can't wait for me as a saver to get some return!!
Go Gold and Commodities!!
10% per year? That doesnt sound much. Is that the worst case scenario?
Hahah 10% is huge dude!!!!
If super inflation is coming, what average person should do?
You would think a man like Summers would have more perspective than this. The 10 year yield is only 1.5% c'mon people! Just a couple of years ago it was 2.5% and it was not the end of the world.
1.5 is hurdling s&p's yield and impacts borrowing costs. I think it shows how over leveraged the system is and that any increase will deflate asset prices (which is ok in my book).
I think the real concern is the SPEED at which we touched 1.6% this week. All this liquidity is creating instability and uncertainty in the bond market which garners panic selling and spills over
BS! Ya'll said that in 2008 during Financial crisis. The FED will prop all markets up.
A lot of US spending is related to housing. If housing prices fall we are in big trouble.
In STL home prices are through the roof!
@@mattmccabe5934 do you mean Seattle for STL.
Dollar is a reserve currency with 60% market cap. If everyone start selling dollars because of fear of inflation things can end up really bad.
Selling them for what, pray tell?
Very confusing at best !
Here I’ll make it simple - plan for inflation
Own cheap and ok businesses. Period.
Finally someone telling the truth in LegacyMedia about where the economy is headed.
The average person will tell you we have had ALOT of inflation in last few years in foods, services in general like car or roofing repairs etc. and now we are really feeling it in building supplies and energy. Not good. However imports continue to decrease, sales of cars down, unemployment took a big jump upwards and other indications of softening demand. Recessionary here. There should be many more limits on margin usage in the stock market as it is continuing to bloat it and the stimulus for many newbie investors will just make this worse.
The fact is, if there is any risk of inflation, it would be a very sad picture that such a distribution could be so negative while the millions that are struggling will only receive 1400 after an entire year, and of those, whoever has been tossed out of the labor force won't benefit from unemployment anyway. I mean, to be so fearful of inflation while so many are getting so little at the same time is either off or would betray an incredible mismanagement, to say the least. Where is the data- based analysis? Aren't there countries in Europe that have supplemented wages completely during the entire pandemic, and are we seeing any inflation there? One serious thing to note, he talks about policies from the 60's leading to the inflation bust then as his cautionary tale. It took until about 1974 for that kind of inflation to actually start disturbing markets. In fact, since Bretton Woods was embarked on after WWII with the goal of full employment across all western countries, it's more likely that the inflation we hit in the 1970's could be argued to be the result of 30 years of wage growth. At the present time, we're at 40 to 50 years of wage stagnation after the market backlash to the aforementioned. I'm willing to hear the arguments, but somehow i don't think that two years of minimal fiscal stimulus is going to produce an inflationary situation that rivals the 1970's. Now, granted, there may be less production because of Covid, which would increase inflationary likelihood. But i don't see anyone in the market pushing for a jobs initiative, because they don't want that competition or wage pressure. So, you eat what you serve. Or rather, you don't, and instead you drum up inflation fears as a former treasury secretary when Americans get tossed a crumb while they're literally in food lines, just so you can help ensure that's as far as it goes, which is all this mans appearances aim to do. With a Biden? They already have the game locked. Hello, Antoinette.
Inflation is a lagging indicator. You won’t know about inflation until AFTER the fact. That being said, with an additional $5 trillion dollars being “printed” and dumped into the economy within 12 months, there WILL be inflation. It’s just a matter of when. In my estimation, it will be after the unemployment problem is solved as the economy opens and the virus concerns go always. So expect higher inflation in 2-3 years.
Why not go the racetrack then?
So why don't you point out the inflation after 2008?
I would really like to know how on earth is the Fed ever going to normalize the insane and reckless monetary policy, except to continuously doubling down the liquidity injection and engage in perpetual quantitative easing. The normal capitalism market economy has been thoroughly destroyed none other than the Fed itself, the valuation mechanism has been so severely distorted it has not been working for a very long time ever since the 2008 financial crisis. The Fed has for far too long recklessly injecting way too much liquidity into the market, operating the printing machine overtime without restraint. It has now single handedly blow up the number of zombie company, from a typical 2% to whooping 20% of total businesses started long before the pandemic, this is how weak the fundamentals of the real economy really is! These companies have been relying on cheap borrowings for years to barely survive. How long is it going to take for these zombies to be nursed back to health and viability of the business model to recover so that the Fed can pull back the liquidity without destroying the economy? Otherwise, the pull back of liquidity is going to destroy 20% of the businesses, not counting the rippling effect to other parts of the economy. This is like detonating a nuclear bomb in the US economy, and will certainly trigger another huge recession if not a 1929 style depression. In fact, I am not even sure if the Fed is really willing to do the right thing or know what the right thing is. Even the slightest pull back of liquidity during "strong economy" time triggered market rout and the Fed cringed quickly and reversed policy. So what is the concrete plan, Fed? Just keep insisting there is no inflation forever and just keep increasing quantitative easing? Or are we witnessing a historical train wreck unfolding and there is nothing anybody could do anyway so we just have to party on while we can?
Jesus. Let it happen already. Currently we're struggling to stave off deflation.
It's 10 am. It's past your bedtime Larry.
Although I agree with much of his opinion I do not agree with his take on corporate tax rates. Just look at the amount taken in during lower rates and higher within the last 10yrs. Not that much different showing that the more you tax corporations the more incentive they have to get creative on ways to avoid or reduce taxation. Additionally the government is not efficient at using the tax money in the first place.
@7 min mark Summers is calling a huge inflation threat by year end. Date stamped and calendared!
He is right.
The interviewer is a voice double for Norm MacDonald.
Why are people talking about normal inflation- all the stimulus money is going to the rich who own the assets. Asset prices will be the only inflation we will see. The whole recovery has been a massive accelerator of inequality and injustice.
Major appliances and many building supplies have gone up 20% in the last year.
The price off food and gas will go up along with everything
Globalization has given 🇺🇸 USA low interest rates. Americans haven’t had a min wage hike since 2009 & it looks like they won’t get another one until the world birth rate reverses (especially with economists type like this guy).😜👍
Globalization destroyed the financial well being if the middle class.
@@raybod1775 Without a doubt.
Inflation will squeeze out the middle class as well
It proved that Summer had knee vision in terms of inflation. Much better than Power who was using the transitory then
Why are we so afraid of inflation? It's a by-product of economic expansion, of course assuming the stimulus will indeed boost the economy, which is the point.
Economic expansion should not be accompanied by inflation. If anything, inflation its the exact opposite. Goods and services should get cheaper.
Maybe they mean hyperinflation?
Inflation rates going back to 2% isnt what they mean I think, but more like going to 6%
Inflation causes prices into increase when the cure is lower prices. Look at 1920s Germany to understand why inflation is harmful
@@godgoldgunsngolf6733 that's hyperinflation
@@godgoldgunsngolf6733 You know nothing about Germany in the 20s.
No supply chains will not be any different, and the corporate tax rate will not change because like the trap the Fed is in, the political parties have there own policy traps, so I think the drift to chaos continues.
If that’s true... why is Gold plummeting?
Fear........
What’s happening to gold?
"Chairman Powell has very explicitly claimed that money doesn't matter in recent testimony. He's basically said that money and the measurement of money doesn't really matter because it's unrelated to inflation," Hanke said.----WOW!!
My guess is that you are reading into his comments what you want to hear.