That's money spent by the rich that is going to be repaid by all rather than by those that enjoyed it. In the long run, we're all dead. John Maynard Keynes
"Expropriate" implies compensation, which is counterproductive in this case.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
So instead shitpile is being bought from them at notional values... Ugh. The brainless should not be in banking. — Willem Buitler
So monetary expansion has been, and I think will continue to be, quite modest and still probably results in a net decrease in total public and private credit and purchasing power available to capitalists -- still a deflationary situation regarding asset prices.
I think you have your banker hat on here when you should be using your economist hat. Balance sheet entries do not say much about true levels of real goods and services, counterparty confidence, and purchasing power in an economy. That requires economic intuition, not accounting intuition which you appear to be relying on too closely with this diary. It's the same mistake conservatives like Merkel are making.
That said, I think you're alluding to valid criticism of overspending in general and that is that it probably does matter what public funds are spent on, something that most Keynesian liberals don't accept. Spending on investments that will save energy costs and increase human and social capital through education and institutional/infrastructure development and maintenance are likely to reduce future inflation rather than add to it. There is some truth to the conservative point that the American economy recovered without inflation after WWII largely because its risky investment in destroying the rest of planet's capital paid off in a big way -- it was a major investment with quantifiable returns, not just digging holes as Keynes suggested was sufficient.
You're arguing like a gambler who puts his house on the poker table but tells everyone it's just for show, as it's practically impossible that he could lose this round.
-- $E(X_t|F_s) = X_s,\quad t > s$
Which means people will keep buying the IOUs. For now.
Ask youself who is stupider: investors and creditors who accept worthless pretend IOUs to cover known bad IOUs, or taxpayers who believe that the IOUs their government has issued in their name are fake and will never be paid out when asked.
You can't have it both ways, either you "solve" the problem with real IOUs, or you issue fake IOUs and "solve" nothing, since everyone knows they aren't worth anything.
The point of real IOUs is that there is real risk attached to them. It doesn't do to hope that things will work out without anybody requiring payment. -- $E(X_t|F_s) = X_s,\quad t > s$
It is, on average, a losing strategy, but if you're going to gamble... The brainless should not be in banking. — Willem Buitler
So the question, as expected, is whether you win before you run out of liquidity... In the long run, we're all dead. John Maynard Keynes
However, the expected number of bets to achieve the outcome is infinite, since the strategy is nonintegrable, and while one game might(!) let you win 1 with certainty, in repeated games you will run out of money, or if you have infinite funds, you will fail to achieve any strictly positive rate of winnings in the long run (and depending on how you compute the rate of winnings, you could fail to achieve any finite negative rate of winnings either, ie the losses can't be usefully limited). -- $E(X_t|F_s) = X_s,\quad t > s$
