RE: FED meeting27 Jan 2021 19:57
Shorn I could write you an essay
Currency is debt, you need an ever expanding currency to keep pace with the debt and still have money circulating
Commercial banks create currency when they lend
Banks lend to people and entities they believe can pay it back helping cause growth, either directly by funding a business or indirectly giving someone a loan to purchase a product which supports a businesses, that helps money flow around the economy and indeed globally with imports etc
When a government does fiscal policy it's generally propping up those in need, why are they in need? because they aren't getting the money they usually get, so it's replacing something healthy with a crutch
The government spending isn't creating currency it's taking money out of the financial system and giving it to people who may use it to pay off debt or buy gold/stocks which doesn't help money flow through the economy
Look at 2020 economic data, it wasn't good despite the March bill
The first thing Biden did was extend an eviction ban - there are 40 million people in the US who can't afford their rent
He also extended student loan deferrals which are big business in the US, they haven't been paid since March and they wont be until September
In August 2020 I read there was 150 billion + in deferred loans, what will that number be now?
The Financial crisis in 2007-8 took a year to play out and I think something very similar is happening right now, things seem calm but under the surface is massive debt and a global dollar shortage - even if you can afford to pay you might not be able to get dollars to do it (see YPF in Argentina)
If people get their stimulus checks and use it on debt, savings, gold, stocks etc that does diddly squat for the economy they need consumer spending and money circulating
They need people employed taking out mortgages, car loans, spending on credit cards, this is not how a healthy economy looks - https://fred.stlouisfed.org/series/CCLACBW027SBOG
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