원문 보기
but I also want to point out another number that a lot of people have been talking about and they think that this shows that inflation is going away and that is the contraction that is currently going on in M2 which is a broad measure of U.S money supply it's actually down now by 4.1 percent year over year now that rarely happens in the United States in fact it hasn't happened during the lifetimes of just about anybody listening to my podcast I mean maybe there's a few people uh that that old that are that are listening to my podcast I don't know but certainly in my lifetime and I'm probably older than most of you I haven't seen it the last time we had a a decline like this or a decline was 1933 and I don't have to remind you what was going on during 1933 we were in the Great Depression so the last time we had a contraction year of year money supply we were in the Great Depression you know now I mentioned earlier that we may in fact be in another depression right now and the fact that money supply is declining could be a good sign because that tends to happen uh in depression it's not that a falling money supply is a bad thing but in a depression that might happen and that it should happen in the depression money supply should go down uh but the fact that it is going down is a sign that we're you know at least in a recession if not a depression now there's only been four years prior to this year in the last 100 150 years that we've had this happen so the time before 1933 was 1921.
now there was a recession in 1921 it would have been a depression had the government done in 1929 one what it did in 1929. see the reason no one ever heard of the 1921 Depression was because we didn't have one because we the government didn't make the mistakes that it made in the 30s what the government did in 1921 was exactly what they say not to do they cut government spending in a recession and there was no stimulus and no bailouts and the cut in government spending basically relieved a burden on the economy and allowed the free market to prevent a depression because the stock market crashed the initial collapse in GDP in 1921 was just as bad as 1929 except Hoover came in in 1929 with all the stimulus you know he was you know he did what you know we've been doing and he basically wrote the failed Playbook that we've been following nobody does what Coolidge did in 1921 because that worked but that involved less government not more now the year before that that it happened was in 1893 they had a bit of a panic that year and so recession now that predates the fed and so he can't blame it on the FED but the money supply didn't contract and it was a rough year and the same thing in 1870 there was a contraction in the money supply so we're experiencing something now that we don't normally experience unless something bad is happening and the fact that we're experiencing it something bad is happening and that's one of the reasons we're experiencing it now there are people that are going to say well doesn't that mean there's no more inflation because if inflation is defined as an expansion of the money supply and I I that's what I say it is if the money supply is now Contracting doesn't that mean we have deflation and that is correct on from that perspective that we have had a year now of slight deflation because you have to put that 4.1 percent contraction in context in fact I tweeted out the chart of M2 and if you look at how much it's gone up in the last few years and then even the last 10 20 years this little decline looks tiny on that chart and remember that prices respond to inflation with a lag and so even if we've had a year of deflation 20 years of massive inflation are still in the pipeline so consumer prices still have a long way to rise to make up for all the inflation of the past so for all the years that M2 was growing we haven't caught up to that to get to the point where we've now had a slight decline but here's the problem that decline is going to be truncated because before too long the FED is going to reverse that decline in money supply money supply is going to ramp up when the FED goes back to QE with a Vengeance in order to prop up everything that's going to come collapsing down that I discussed and everything that it that it built on a foundation of cheap money is now in the process of collapsing and we would have a massive depression in order to clean up this mess the FED never allows the market to clean up its messes not since the 1930s that is the Playbook the problem is we've run out of road to Kick the Can down we're now at the point where if we try to do that we're on a new road to hyperinflation so that's where we are now the FED is not going to allow this to continue the monetary heroin is going to be reintroduced into the market and so this deflation is not going to be allowed to continue now that's what the market needs we need healthy deflation we need money supply to contract um we need debts to default we need companies that never should have been in business to fail the entire economy needs to be restructured on a solid foundation we need to get rid of all these imbalances that have been created by the FED I mean think about it um loans are supposed to be a function of savings you're supposed to borrow the money that other people are not spending that's where a savings come from under consumption that's what finances capital investment we haven't done that we've been financing uh everything with inflation we've just been printing money and loaning that out and spending that but inflation is not a substitute for legitimate savings and a lot of these Investments that have been financed through inflation are unsustainable in the long run if they're financed properly out of savings in our consumption then they are sustainable and they can continue but what we have now is a massive credit bubble that the FED inflated and now the air is coming out because rates have gone up and the FED is saying it's going to continue to hike rates and so this whole thing is going to implode until they cry uncle and reverse course foreign
Comments 0