The Longest Record Broken: Gold/Silver Ratio Hits Highest in Over 5,000 Years

Re:The Longest Record Broken: Gold/Silver Ratio Hits Highest... by radford-neal on Wednesday March 18, 2020 @08:41AM (#22615930)

There may well be serious real problems, which the central bank can't magically solve. But if you're just worried that there might not be "enough" inflation, the central bank has unlimited ability to create that, if it wishes to. (Of course, whether such inflation would be a good idea is debatable, and could depend on the circumstances.)

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Re:The Longest Record Broken: Gold/Silver Ratio Hits Highest... by nabla9 on Wednesday March 18, 2020 @09:17AM (#22616265)

> the central bank has unlimited ability to create that, if it wishes to.

This is not true as the recent decade shows. Japan has tried to increase inflation almost two decades.

Just increasing the money stock does not create inflation if the velocity of money decreases at the same rate.

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Re:The Longest Record Broken: Gold/Silver Ratio Hits Highest... by radford-neal on Wednesday March 18, 2020 @08:14PM (#22622927)

No, Japan has not really tried to create inflation. If they had, they would have succeeded.

If the government prints lots of cash, and then mails a bunch of cash to every person in the country, then there will be inflation. Lots of inflation, if the amount of cash is high enough. And there's no limit to how high the amount can be.

To doubt that, you have to believe that someone of previously modest means who now has a million dollars of cash in hand will just horde it, rather than go out and buy the $40,000 car they've been wishing they had, or the nice $500,000 house they now could live in, or the nifty $10,000 camera and lens set that would be really fun to play with, or the...

Actually, you don't have to just believe that someone will horde immense amounts of cash rather than buy real, useful stuff with it, you have to believe that almost everyone will horde the cash.

People aren't like that.

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Re:The Longest Record Broken: Gold/Silver Ratio Hits Highest... by disease on Wednesday March 18, 2020 @11:43AM (#22617863)

If I remember correctly from my econ classes, deflation has a nasty spiraling effect where any currency introduced into the system is subsequently hoarded, which decreases economic activity which makes money even more valuable which increases hoarding ...

There are many tools in the toolbox for handling inflation. For deflation, not so much.

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Re:The Longest Record Broken: Gold/Silver Ratio Hits Highest... by AnimalMuppet on Wednesday March 18, 2020 @12:25PM (#22618352)

The central bank can create unlimited inflation in financial assets. In, say, food, or cars, not so much. (I mean, I guess they could buy a bunch of food and cars, but that's pretty far out there, even for the current expansive definitions of what the central banks can do.)

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Re:The Longest Record Broken: Gold/Silver Ratio Hits Highest... by anjc on Wednesday March 18, 2020 @01:37PM (#22619181)

Isn't this what some governments (through purchasing supply) and some central banks (through relaxed lending restrictions) have done with real estate?

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Re:The Longest Record Broken: Gold/Silver Ratio Hits Highest... by AnimalMuppet on Wednesday March 18, 2020 @01:59PM (#22619438)

Yes, but real estate is at least half in the "financial assets" category.

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