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Mtbguy56 t1_iu61r7h wrote

Don’t they teach Economics 101 over there?

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Y0ung_Greg t1_iu6ucf5 wrote

There are 4 types of economy: advanced, developing, Argentina and Japan

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leeta0028 t1_iu62e8w wrote

Japan's current inflation rate is 3%. The primary problem is raw materials that need to be imported for businesses.

Having said that, BoJ needs to watch closely for a GBP style run. It's probably more important they say they're watching than they do anything right now tbh.

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addictedtolols t1_iu757sl wrote

clearly you know nothing about japan

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Etiennera t1_iu7b9ei wrote

basically every thread on the subject is inundated with "I am economist and Japan stupid"

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[deleted] t1_iu67pds wrote

[deleted]

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MrBubbles226 t1_iu7878g wrote

They actually suffered deflation for a long period of time, which hurt investment from what I've read. In this case some inflation might be good, which is strange to say.

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EconomistPunter t1_iu60ssm wrote

I guess when you get devastated by decades long deflation which erodes your position in the world, you don’t worry about inflationary ramifications.

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RedditIsShit9922 t1_iu6ucwu wrote

Spending money to fight inflation...

Same nonsense in Germany.

How about only supporting the people who actually need support? Nah just spend hundreds of billions, thus making inflation even worse.

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addictedtolols t1_iu755l6 wrote

if spending made inflation worse then japan should have earth shattering, empire ending inflation since the 90s. but japan is one of the most deflationary places on the planet alongside south korea and eventually china

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Various-Way-7219 t1_iu82x83 wrote

Because there's no spending in Japan. Japan has lowest broad money growth since 90s.

Japan central bank is just straight up buying bad bonds and stocks from public and private sectors to keep them afloat. BoJ cannot do anything with these on their books. These are now essentially out of economy.

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r448191 t1_iu7vgsb wrote

Spending doesn't make inflation worse. Printing that money you're spending makes inflation worse.

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RedditIsShit9922 t1_iu8ckpd wrote

Spending the money means higher debt. Inflation is fought with higher interest. You think it is a good idea to have high debt when interest is rising?

And when the government gives the average Joe more money, then this will make inflation worse in our current situation. The current inflation is a result of there being high demand, lots of money but not enough production/transport to meet the demand. If the people had less money, they would buy less. Thus demand would shrink and inflation would be reduced. But with more money, people will want to buy even more shit.

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Scar589 t1_iu8enuj wrote

I wish I could upvote this a million times.

Edit: u/r488191 is correct though. You both are. If you spend the money you already have it won't affect inflation as the amount of money in circulation stays constant. But if you print (like u/r488191 pointed out) or borrow (like you pointed out), the supply of money grows and so does inflation.

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RedditIsShit9922 t1_iu9tjyu wrote

Right, but demand is also an issue. The state using the money to reduce debt will result in less demand than giving money to everybody.

I am not against support from the government by the way. It just frustrates me how undifferentiated this support is. Here in Germany, literally every citizen gets this inflation support, including freaking millionaires.

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xmenacenat t1_iu7q3kf wrote

Keep those money printers pumping

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jphamlore t1_iu60yo9 wrote

Japan has been using an equivalent of MMT for many years now? They were already printing yen to cover their budget deficit and more?

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addictedtolols t1_iu75e1o wrote

japan has "printed" like a quadrillion yen, just like china has "printed" like a quadrillion yuan. but japan is one of the most deflationary places on the planet and china is going to join them eventually. "money printing" causing inflation hasnt been a thing for the last like 50 years

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Various-Way-7219 t1_iu831n8 wrote

>"money printing" causing inflation hasnt been a thing for the last like 50 years

Seeing the CPI numbers in US since 2021....

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InexorableBullshit t1_iu86kzk wrote

Been printing money nonstop since 2009, so that might not be it exactly.

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Various-Way-7219 t1_iu8c0ze wrote

Yes I missed the part where US had 0 inflation since 2009. Oh wait....

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Enough-Crow20 t1_iu63wpj wrote

Monetary "policy". USA is sitting at 8% (manufactured/pretend) inflation now and the whole country is about to go into a depression because "Fed" is being reckless with their authority. Coming soon to a country near you...

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doodlesandyac t1_iu6a357 wrote

They aren’t being “reckless with their authority” covid happened and they had to react to an impossible situation, they overshot it and now need to compensate the other direction

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lostcattears t1_iu6t7ju wrote

What are you even smoking? reacted to an impossible situation? You mean they didn't know that printing 4+ trillion in less than 2 years themselves and that Inflation would not happen and they couldn't foresee their own stupidity?

There was zero control in the way they played out their hand. They were reckless extremely reckless. Everyone at the Fed should be replaced.

We Might of had a small recession with covid. Now we might have depression instead. This one would 100% be caused by the Fed and this would affect the entire world due to how intertwine the USA is with the entire world. This is real Blood on the Feds hand themselves not some bankers/capitalist/criminals.

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doodlesandyac t1_iu6xgdl wrote

Are you kidding me? Covid caused one of the biggest drops in economic output we have ever experienced. Maybe you didn’t notice all the businesses closed?

And yeah people in the Biden administration like Larry Summers warned him about overshooting it and getting runaway inflation. He chose not to listen to them. The US isn’t alone here, most nations did exactly what we did to prevent a global depression

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Enough-Crow20 t1_iu6k2ue wrote

they're being reckless. interest rates are going to 9% by eoy...save this then tell me later...

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doodlesandyac t1_iu6n4lr wrote

Yeah that’s because we are now in a wage-price spiral and the only way out of it is to raise interest rates and temporarily spike unemployment. Do you have a better idea?

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SlaughterRain t1_iu7bt1r wrote

That's not going to work out to well if it's not targeted.

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Scar589 t1_iu87n3y wrote

Okay, so judging by the comments here, most people support insane money printing. Humanity is doomed indeed.

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JOAO-RATAO t1_iu880am wrote

Better get some gold...

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HurritUrarti t1_iu6e3up wrote

Reminds me of what I heard on Youtube Short just half an hour ago. A guy said that nearly 40% of the US Dollars that exist in the whole world have been printed in the past 13 months alone. Capitalism capping at its finest.

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Utoko t1_iu6lpsj wrote

And despite that the dollar index is at a 20 year high. Currencies around the world are in a lot more trouble.

and for the US export it becomes problematic if the DXY goes up too fast.

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VanquishedVoid t1_iu6voip wrote

Wouldn't be surprising, because old money that's worn down constantly gets cycled. This is one of the largest uses for newly printed money.

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NumbersDonutLie t1_iu6yahj wrote

For M2 money supply, that might be right. That’s because that money is an aggregate of the deposits in average (poor) peoples bank accounts is what constitutes M2. Corporations through a kinipchin fit to capture this cash into their coffers.

Past stimulus was directed toward M3 (rich people and corporate deposits). M3 stimulus doesn’t cause inflation because ultra-rich people don’t actually spend money (ie. Trickle-down is bullshit)

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HurritUrarti t1_iu7xmu3 wrote

I appreciate your explanation, but the more pressing question now is why the fudge am I being downvoted by "you got free-speech" Americans? 😭 I was telling a simple fun fact.

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Scar589 t1_iu87153 wrote

If they don't spend spend money then why would they need it in the first place.

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NumbersDonutLie t1_iu8x9la wrote

Great question.. To be more specific, they don’t spend money on anything that stimulates the economy in any meaningful way. They use money as a tool to make more money and buy political influence, to ultimately make more money and gain even more power.

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