{"id":15695,"date":"2015-12-27T09:36:56","date_gmt":"2015-12-27T14:36:56","guid":{"rendered":"http:\/\/olduvai.ca\/?p=15695"},"modified":"2015-12-27T09:37:20","modified_gmt":"2015-12-27T14:37:20","slug":"i-was-asked-whatever-happened-to-inflation-after-all-this-money-printing","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=15695","title":{"rendered":"I was asked: Whatever Happened to Inflation after all this Money-Printing?"},"content":{"rendered":"
\n

I was asked: Whatever Happened to Inflation after all this Money-Printing?<\/a><\/h3>\n

So where\u2019s my free lunch?<\/strong><\/p>\n<\/header>\n

\n

I was asked once again why all this central-bank \u201cmoney-printing\u201d along with global zero-interest-rate or even negative-interest-rate policies haven\u2019t caused a big bout of inflation, considering how currencies are getting watered down.<\/p>\n

It\u2019s a crucial question that baffled many minds for a while, but now, as this thing has been dragging out for seven years, bouncing from one major central bank to the next, without end in sight,\u00a0the answer is becoming clearer.<\/p>\n

This chart by\u00a0NBF Economics and Strategy<\/u><\/a>\u00a0shows the growing pile of assets, expressed in dollars, that the \u201cfour big central banks\u201d \u2013 Fed, ECB, Bank of Japan, and Bank of England \u2013 have heaped on their balance sheets: nearly $11 trillion. This does not include what China is doing. The forecasts for 2016 and 2017 assume that the Fed and the Bank of England will stay away from QE, that the BoJ will add annually \u00a580 trillion (with a T) to its pile and the ECB \u20ac60 billion, with exchange rates unchanged:<\/p>\n

\"Big-Four-Central-Bank-Balance-sheet-2007-2017\"<\/a><\/p>\n

Consumer Price Inflation v. Asset Price Inflation<\/strong><\/p>\n

So this global binge of QE has caused inflation, a lot of it, but\u00a0not\u00a0consumer<\/em>price inflation<\/strong>. It has caused rampant\u00a0asset<\/em>\u00a0price inflation<\/strong>, with stocks, bonds, real estate, classic cars, art\u2026 all skyrocketing over the years.<\/p>\n

Just about the only major asset class that didn\u2019t experience gains is the commodities sector. There, prices have collapsed. And we\u2019ll get to that in a moment.<\/p>\n

So why has QE caused rampant asset price inflation but little consumer price inflation? Because the money never went to consumers \u2013 in form of wages. They would have spent most of it, thus driving up demand that could have created some inflationary pressures in consumer prices. But they never got this money.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n

 <\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

I was asked: Whatever Happened to Inflation after all this Money-Printing? So where\u2019s my free lunch? I was asked once again why all this central-bank \u201cmoney-printing\u201d along with global zero-interest-rate or even negative-interest-rate policies haven\u2019t caused a big bout of inflation, considering how currencies are getting watered down. It\u2019s a crucial question that baffled many […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[37,1619,124,426,538,4254,4255],"class_list":["post-15695","post","type-post","status-publish","format-standard","hentry","category-economics","tag-asset-bubbles","tag-asset-inflation","tag-central-banks","tag-inflation","tag-money-printing","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15695","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15695"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15695\/revisions"}],"predecessor-version":[{"id":15697,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15695\/revisions\/15697"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15695"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15695"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15695"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}