They are currently 1800.
If all that extra money had devalued fiat currencies globally (at roughly the same value), why hasn't gold increased?
There have been a number of cases of banks being found guilty of it as well: - https://www.reuters.com/article/us-usa-metals-charges/u-s-ch... - https://www.reuters.com/article/jp-morgan-spoofing-penalty-i...
Look up naked short selling if you want to see how this works. Essentially, futures markets allow trading gold without holding any physical gold so banks can take dollars and use that to short the price of gold. It has gotten to the point where more “paper gold” is bought and sold on futures markets than physical gold that exists in the world.
US M1 supply has increased 40 fold since 2011. If that's hiding "real" inflation, why are commodities less than 1/10th of the cost they were 10 years ago?
Of course, that leads to the question of "what would serve as a good proxy for the actual value of currency", and I don't have a good answer to that. CPI is the traditional answer, but I don't think it's a sufficient one because
1. CPI misses out on some of what people care about (e.g. asset prices are actually important in determining what kind of long-term lifestyle people can afford) 2. We want to disentangle "commodities went up because of supply shocks that will resolve themselves" and "commodities went up because money is permanently worth less", to the extent that it is even meaningful to disentangle these things
So yeah, it is entirely possible that the dollar is worth less [relative to what people care about], and also gold is worth less [relative to what people care about], and it is even possible that that is causally downstream of injecting a bunch of dollars into the economy, but I have no idea how one would robustly demonstrate that that was or was not the case. If you have any ideas on that front I'd love to hear them.
Also if you are aware of any assets that are _strongly and reliably anticorrelated_ with most other assets during recessions, I would be interested for much more personal reasons.
If I have a 300k mortgage over 25 years at 7% that's $2121 a month
If I have a 500k mortgage over 25 years at 2% that's $2120 a month
The "price" doesn't really matter at that scale, it's the monthly payment, which hasn't gone up despite house prices increasing 67%
(More importantly with things constrained by zoning/land availability, the monthly price will be set to take all my spare case, as there's more demand than supply, so prices rise until the demand drops, which means people choosing not to live in that area. In other words the higher the salaries in a given area with fixed supply, the higher the cost of housing - be it mortgage or rent)
On the other hand if my weekly shop goes from $150 to $200, that's a 30% increase, and does make a difference.
Velocity * Money Supply = Price Level (changes in this are inflation) * Economic Output
During early pandemic, velocity tanked because people were spending less so it was not a foregone conclusion that increasing the money supply as much as the Fed did would lead to inflationary changes in the price level.
Now, we are seeing velocity somewhat rebound while output is not increasing as much as we would expect and the Fed is doing little to scale back money supply.
More seriously, Ukraine is probably not the reason of scarcity, but if you want to solve the supply chain, you’ll hit China very fast: Their growing local population means that one day, they’ll keep everything they produce for themselves. And that’s big enough to be the cause of inflation: Mid-term inflation is probably due to lack of productivity during Covid; long-term inflation is certainly due to the lack of goods produces in the West, while the East starts to keep their production.