What is Wrong With This Picture?
One of my oldest and favorite charts to monitor. As you can see from 2000 on everything changed.
The equilibrium was disturbed and ever since we are all over the place.
If you observed this chart In 2006/07 you would have known we were on an unsustainable path
as the household debt was out of control.
Fast forward to today and we once again find ourselves on an unsustainable path as public debt
has far exceeded previous norms and we now face soaring inflation.
I have heard so many new "experts" use language such as
"Net financial assets"
"Fiscal flows"
"Credit impulses" etc..
Which basically means printing is good. Wrong! Printing has lost its effectiveness a long time ago.
As shown here
Obama got about $0.36 cents of GDP for every new $ printed out of thin air. Today we barely get
$0.19 cents of GDP for every $ printed and falling rapidly. Ideally, you should get more than $1
of GDP for every new $1 printed. Not less!
So you see not too much "caring" in the "Cares Act" since we are all paying for it with 6.8% inflation.
The story doesn't change much when looking at private money creation as seen here.
As you can see, the Credit Impulse, FIscal Flows, & Net Financial asset, crowd are a bit out of touch with
reality. But it sure sounds good.
We are headed in the wrong direction! I'll just ended it with that.
The equilibrium was disturbed and ever since we are all over the place.
If you observed this chart In 2006/07 you would have known we were on an unsustainable path
as the household debt was out of control.
Fast forward to today and we once again find ourselves on an unsustainable path as public debt
has far exceeded previous norms and we now face soaring inflation.
I have heard so many new "experts" use language such as
"Net financial assets"
"Fiscal flows"
"Credit impulses" etc..
Which basically means printing is good. Wrong! Printing has lost its effectiveness a long time ago.
As shown here
Obama got about $0.36 cents of GDP for every new $ printed out of thin air. Today we barely get
$0.19 cents of GDP for every $ printed and falling rapidly. Ideally, you should get more than $1
of GDP for every new $1 printed. Not less!
So you see not too much "caring" in the "Cares Act" since we are all paying for it with 6.8% inflation.
The story doesn't change much when looking at private money creation as seen here.
As you can see, the Credit Impulse, FIscal Flows, & Net Financial asset, crowd are a bit out of touch with
reality. But it sure sounds good.
We are headed in the wrong direction! I'll just ended it with that.
Real Macro Economic Investing
patreon.com/Realmacro
patreon.com/Realmacro
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