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Spending money, if you stop and think about it, only transfers that money to someone else. The money is still there, its quantity hasn’t changed, but it’s just in a different person’s bank account or wallet now. That’s fundamentally why money can’t “flow into” an asset. If you buy an asset, that money you spent is still available to spend, just by someone else rather than by you. It’s not somehow sitting there inside the stock or bond or real estate, waiting for you to sell your asset so it can emerge back into the financial landscape and be spent again.

Hazey 7mo ago

Money supply is always net increasing, but what the increasing supply gets spent on determines where increases in prices occur. Parking it in assets for long periods means it's not placed in demand for everyday things but causes an increase in asset prices. The "excess" inflation after plandemic money handouts was because it got circulated into buying actual things, versus the typical way money is handed out that gets parked in assets with the goal of sucking in more money in the form of rents and high interest, ie usury.

Economics is mostly alchemy and lies because the forcing function calculation ultimately being made is determining distance to the money spigot

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Discussion

frphank 7mo ago

Sounds about right.

f0xr 7mo ago

You can't park money "in" assets, that's an economics myth. If you buy an asset, the money doesn't go "into" the asset, it goes into the bank account of the person selling the asset to you. They can either hold it in their bank account and get inflated away, or immediately turn around and spend it to buy something, which starts the same cycle over again.

Without understanding that about the way money works, it's impossible to understand why asset prices move or why price inflation happens.

Hazey 7mo ago

Sounds like semantics. If you invest your money in something, that money is not moving until you take it back out by selling it. Meanwhile the person you bought the asset from will invest it, park it, whatever you want to call it, into something else. Money in investment class assets just moves around between investment class assets, mostly. As more money arrives to buy those same assets, the price rises. What am I not getting.