General Discussion

lostnfound

(16,189 posts) Sat Apr 11, 2020, 08:06 AM Apr 2020

$7000 per person - man woman and child.

A couple days ago, the Fed announced that it would “inject another $2.3 trillion to prop up the American economy through a series of unprecedented emergency initiatives.”

Until now the Fed has “ never exercised its ability to purchase muni bonds (to avoid picking and choosing the areas where it intervenes), and it has also been reluctant to wade into to lower-rated, riskier corporate credit markets“ according to this Forbes article

While we are distracted with coronavirus, the Fed has announced putting itself in a position of helping certain state and local governments get stable (and avoid helping others) and decided to help banks buy up “junk debt” such as debt taken on by fracking companies.

It is worth noting that this setup will not necessarily pump $3.5 trillion of monopoly money into the economy permanently.

When it makes a loan, the Fed temporarily sends fresh dollars out into the financial system. But that loan must be paid back with interest, sucking the funds back out. When the Fed buys bonds using its emergency powers, it takes an asset out of the system in exchange for central bank cash. https://www.nytimes.com/2020/03/26/business/economy/fed-coronavirus-stimulus.html

So which of these things are wrong and which are right?
1) the stock market has been / will be puffed up for a bit by the Monopoly money
2) Cities & states will be extorted / punished / rewarded for sucking up to Mnuchin
3) inflation is coming because that’s what happens when fed prints money
4) people who had investments in fracking just got bailed out
5) inflation is coming because shortages due to epidemic / loss of production
6) food prices climb - think of workers in meat processing factories etc
7) deflation since demand is down joblessnesss, depression, masses are broke

7 replies

= new reply since forum marked as read

Highlight:

$7000 per person - man woman and child. (Original Post) lostnfound Apr 2020 OP

On inflation - CPI report: March prices dropped 0.4% vs. February (a lot due to oil prices) progree Apr 2020 #1

1 and 2 and 4 are givens. It's impossible to know whether 3, 5 and 6 happen now, or 7. Squinch Apr 2020 #2

#4. Is it a loan or a grant. 3Hotdogs Apr 2020 #3

The looting of America. Raw and uncensored. OneBro Apr 2020 #4

That's true too. Nt lostnfound Apr 2020 #5

+1 lunasun Apr 2020 #6

Would love some more thoughts on this. What will collapse next? lostnfound Apr 2020 #7

progree

(10,912 posts)

1. On inflation - CPI report: March prices dropped 0.4% vs. February (a lot due to oil prices)

Reply to lostnfound (Original post)

Sat Apr 11, 2020, 08:14 AM

Apr 2020

Reuters, 4/10/20
CPI: March: -0.4%, 12 months: +1.5%,
Core CPI (excludes food and energy): March: -0.1%, 12 months: +2.1%,
https://finance.yahoo.com/news/u-consumer-prices-post-largest-125040499.html

The Labor Department said March's CPI report had been affected by the coronavirus, with data collection by personal visit suspended on March 16. It said data collection last month was also impacted "by the temporary closing or limited operations of certain types of establishments," leading to "an increase in the number of prices being considered temporarily unavailable and imputed."

BLS summary report:
https://www.bls.gov/news.release/cpi.nr0.htm

===========================================

Am not saying won't have inflation starting soon, but anyway the initial effect of the shutdowns has been deflationary.

Squinch

(50,993 posts)

2. 1 and 2 and 4 are givens. It's impossible to know whether 3, 5 and 6 happen now, or 7.

Reply to lostnfound (Original post)

Sat Apr 11, 2020, 08:19 AM

Apr 2020

But that's a good summary of the possibilities as I see them.

3Hotdogs

(12,402 posts)

3. #4. Is it a loan or a grant.

Reply to lostnfound (Original post)

Sat Apr 11, 2020, 08:39 AM

Apr 2020

If its a bond, its a loan. It has to be paid back.

If not, bankruptcy and the problem was just stalled.

OneBro

(1,159 posts)

4. The looting of America. Raw and uncensored.

Reply to lostnfound (Original post)

Sat Apr 11, 2020, 09:03 AM

Apr 2020

Last edited Sat Apr 11, 2020, 09:38 AM - Edit history (1)

The Republican plan isn’t complicated:
Prop up poorly managed red states with blood and money from blue states; and
Mortgage America to the absolute fucking brim before 2045 or so when America will no longer be majority white. https://www.brookings.edu/blog/the-avenue/2018/03/14/the-us-will-become-minority-white-in-2045-census-projects/ (Actually, it’ll still be majority white, but Republicans group ALL minorities into one lump and assume that lump will be just as vile and racist as Trumpvangelicals and that with their newfound 2045 ish power they will treat white people the way white people have treated minorities since Columbus discovered savages and free stuff in “India.”)

My guess is that right around 2045, red states will truly decide to cede from the Union “‘cause look at how all them minorities have ruined it.”

lostnfound

(16,189 posts)

5. That's true too. Nt

Reply to OneBro (Reply #4)

Sat Apr 11, 2020, 09:56 AM

Apr 2020

lunasun

(21,646 posts)

6. +1

Reply to OneBro (Reply #4)

Sat Apr 11, 2020, 10:19 AM

Apr 2020

lostnfound

(16,189 posts)

7. Would love some more thoughts on this. What will collapse next?

Reply to lostnfound (Original post)

Sat Apr 11, 2020, 01:28 PM

Apr 2020

What will persist?
When they do a “shock doctrine” move on other countries, it’s included rapid change, gutting of the social safety net, privatization, and hyperinflation..

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