Comments by "Frederick Miles" (@frederickmiles8815) on "Why strategists don't think inflation will be a problem for markets: Morning Brief" video.

QE (MMT) is deeply deflationary; current inflation is due to supply chain and inventory pain and will be transitory - leading to less production and fewer services; deflation is our endstate.
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@selekedimafate5935 it is actually deflationary in our fractional reserve banking system. Healthy inflation is created via bank lending - bank's create currency in the form of debt within our Keynsian system (mortgage, credit, auto, business, etc..). In QE - Treasury creates bonds, which are bought by primary dealer banks or foreign banks, then that pristine collateral is swapped for Fed Reserve notes that can only be used in support of repo transactions. Once the pristine collateral is trapped within the Fed it cannot be used in support of lending - hence recent reverse repo's as banks drown in liqudity.
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@r987p yes it is; consumers and wholesalers cant meet increased prices due to debt load and cant lever up more with banks tightening - as they drown in cash. This leads to reduction in prodcution of goods and services - like in '28 and '29. Through massive rehypothecation of the stock market with automatic etf's full of iou's we are ripe for a depression. If you want to see hyperinflation checkout China over the next 6 mos to 18 mos - they are Weimar, not us. The only way we have true inflation in the US under current conditions is through direct pushes into the economy via Fed or Treasury that by pass the banking system - both of which would be illegal under current rule of law. The Fed is not a real central bank like say ECB, BOJ, or other foreign peers.
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@selekedimafate5935 not the system; but the effect QE has on it.
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@selekedimafate5935 I dont think you understand the mechanics of QE or why the Fed went this route; QE prevents near term interest rates from rising via artifically buying pressure - government induced, not market driven. Every time the market is allowed to set rates - such as tapering in Q3/Q4 2019 repo rates spike due the amount of zombie's and levered up fund's seeking out short term cash injections in support of their survival and or grift. Banks are drowning in cash because they cant buy enough pristine collateral (SLR rule) that has been sucked up by the Fed. Currently banks have lent out the same treasury bond five to seven times over - to make up for the lack of collateral. QE (MMT) is the source of the wealth gap and deflation; with the Fed sucking up Treasury folks are playing games with Treasuries via rehypothecation - same as what is happening the stock markets with stock's - ETF's are full of IOU's, naked shorting is not a one enough it is the standard. Again this is deflationary - causing a decrease in production and services as the wealth gap expands.
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S Suwandi I am hoping that they let markets set rates going forward, return to Volcker; now is the perfect time to launch another 40 year debt cycle. If they made the safety net whole and moved away from the fund model to a transactional float based model that would eliminate unfunded liabilities, they could sell the exisitng 2.9 trillion in the social security treasury into the economy and use the cash to de-leverage and invest in specific infrastructure that is dragging the economy to hell.
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S Suwandi agreed, QE has killed fixed income and now large players will do things such as buy up housing and package those cash flows to mimic fixed income products. If they let the market set rates they could flush out zombies and naked shorts in a timely and truely 'V' shape manner allowing for an actual recovery. I would also hope they could simplify and balance the budget while improving safety net - just by issuing the trillions held by the Federal government. Literally the Fed and federal government own the vast majority of debt, not foriegn nations. My fear is Yellen and Powell's ego's / emotion's cloud their judgement; they dont want to admit they accidentally created this nightmare; they are the authors of the oligarchy. My true fear is they follow the IMF, WEC, and ECB down the rabbit hole and destroy whats left of the real economy / middle & working class.
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@selekedimafate5935 CPI is way down that is deflationary; interest rates are not going up that is deflation - the transitory inflation is three factors: supply chain glut, labor wants/needs more, and corporate debt is through the roof. It will be transitory because it is not sustainable, meaning: supply chain cost increased cant be passed on due to debt, profit margin crunches caused by servicing existing debt and labor cost going up. This will lead companies to do more with less and or reduce production and services. Inventory is also a great number to watch; goods went through the roof in regards to wallet allocation of consumer - now it is returning to more service oriented, meaning companies and consumers have lots and lots of inventory. And no i didnt; i dont think you understand monetary policy or what inflation is; for instance - if you increase the monetay supply by 20 times current amount and look up that increase in the Fed you dont move M2; money does not move; it all just paper. The inflation in the financial economy is not due to new money circulation but rehypothithicaion of existing shares, t-bills/t-bonds, etc.. This will be the cause of the next collapse - to little quality collateral, while in '08 it was to little liquidity. Both were caused by the Fed: Greenspan caused liquidity crisis and the new set of fools caused the collateral crisis - the Fed is teh RCA; their failure to understand the system they have inherited has f*cked the global economy yet again.
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