21 sats \ 5 replies \ @Undisciplined 6 Sep \ parent \ on: Is The "Everything Bubble" About To Pop? econ
One of my favorite economic quotes is from Doug Casey:
"It's metaphysically impossible for everything to be overpriced."
I think "everything bubble" is a cool term, but isn't really accurate. The bubble we're referring to began at least as far back as when we went off the gold standard. That's when the store of value function of money was destroyed. Since then, the monetary premium on pretty much all durable assets has been increasing.
This is actually related to my post Reflections from the Nakamoto Simulator.
Yupp! I surely agree on this. The inflation that's at killing point is also much related to this in most of the countries. India does follow a bit of Gold Standard till now. May be that's why we don't witness as much inflation as you guys do there?
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Our price inflation is dampened, because we export it to the rest of the world.
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I'm sorry I just didn't get it.
What do you mean by 'export it to the rest of the world'?
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Since the dollar is the global reserve currency, when we print new money and spend it here, prices also rise everywhere else that uses dollars. Those other places don't get to spend newly created dollars, but they do experience the inflation.
This is what Cantillon Effects are. The first spenders of newly printed money benefit at the expense of the later spenders, because prices don't adjust until after the money is spent into the economy. America spends dollars first, then they slowly trickle out to the rest of the world.
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Thanks!
The Cantillon that discusses about the booms and busts! I got it now. So, USA spends dollars at the expense of rest of the world. This is definitely one big issue which the Russians and Chinese already know, not surprised that they are dedollarizing because they are foes to America. ECB with EURO aimed at the same thing. EURO was invented with the aim to overcome dollar supremacy, but it has now failed! Am I right?
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