Originally Posted by KevinNYC
And the high inflation was broken by the actions of the Central Bank following the same countercyclical Keynesian prescriptions the Central Bank is doing now. Berwick the zimbabwe-lover hates Central Banks.
Why do you think the amount of money in circulation is more than the economy can handle? It seems to me that past several years have been an experiment, an experiment that has shown quite convincingly, the economy right now can handle that amount of money without inflation.
because the money is currently mostly held up in reserves and not fully utilized in the united states. it hasn't been "fractionally" extracted or multiplied yet so it's not fully in circulation, but the money is sitting there and that is the threat because it serves as a potential bomb because once it's extracted, it's not easily reversible.
but if you look at where a lot of money has been going to, it's been going to higher return areas areas (particularly foreign investments). QE shows the most visible results in the small countries that have been eating pieces of QE. ie. Singapore, Hong Kong, South America. those countries didn't even print money, but they had a huge money supply injection through hot money that was created by QE, and they're experiencing some crazy price level gains.
but i don't subscribe to the idea that "hey, there doesn't seem to be any real hurt yet, so let's keep on doing it" concept. you might not see a mess now, but you should see the threat that can cause a real mess. so if it's unhealthy, and you do it enough, eventually, something bad will happen. just hope we can manage to get through that mess.