You know that rich people don't just own stocks, right?
While the talking heads were clutching their pearls, wringing their wrists, and wagging their fingers over $400B in stimulus checks, ten times that amount was being printed into the real estate market, distributed in rough proportion to real estate holdings. Rich people paying themselves for being rich. "Just" isn't how I'd describe it. Not in magnitude, not in morals.
> Those debt obligations however remain. That future money still has to be paid in to cancel out the debt, whether that comes from home borrowers or from the Treasury
Why? Why do you keep engaging with the hypothetical universe that we do not inhabit where they don't pull the lever again, even though they got away with printing trillions into their pockets the last two times?
Those debt obligations are getting paid back like the father of a deadbeat son is getting paid back: he'll roll the loans so that he can tell his golf buddies that he has been paid back, sure, but he isn't going to be paid back and he doesn't really expect to be paid back.
My point is duration transformation doesn't create new money, it moves future money into the present. This may increase the money supply immediately, but it drops over time back to where it would have been.
Money isn't "printed" in the real estate market, valuations are notional.
> Those debt obligations are getting paid back like the father of a deadbeat son is getting paid back: he'll roll the loans so that he can tell his golf buddies that he has been paid back, sure, but he isn't going to be paid back and he doesn't really expect to be paid back.
> How much do you want to bet that [Federal Reserve Total Assets] goes under, say, $1T by 2030?
In your universe, the aggregate debt comes due, markets tank, and rich people take the L like grown ups.
In my universe, the aggregate debt comes due, markets tank, rich people persuade politicians to pull the lever again, they do, the fed goes and buys their assets, markets go back up, and the fed balance sheet increases. The fed's long-term increasing balance sheet represents a long-term net cash flow right into rich peoples' pockets.
Again, if you are confident in your view of the universe, I'm asking you to put your money where your mouth is.
While the talking heads were clutching their pearls, wringing their wrists, and wagging their fingers over $400B in stimulus checks, ten times that amount was being printed into the real estate market, distributed in rough proportion to real estate holdings. Rich people paying themselves for being rich. "Just" isn't how I'd describe it. Not in magnitude, not in morals.
> Those debt obligations however remain. That future money still has to be paid in to cancel out the debt, whether that comes from home borrowers or from the Treasury
Why? Why do you keep engaging with the hypothetical universe that we do not inhabit where they don't pull the lever again, even though they got away with printing trillions into their pockets the last two times?
Those debt obligations are getting paid back like the father of a deadbeat son is getting paid back: he'll roll the loans so that he can tell his golf buddies that he has been paid back, sure, but he isn't going to be paid back and he doesn't really expect to be paid back.