Why the prices have not disappeared in the United States and the governor has no need to issue dollars | Economy | Notice

Increase the money in circulation per sub not the prices.

And yes, that more than the governor of EE.UU. has inundated dollars the economy in the last months, inflation is seen at moderate levels, as well as providing a classic convenience of many economists.

Hecho, the general index of prices rose by 1.4% in the last year. Although the money circulating in the economy increased by less than 25.8%, according to Federal Reserve data.

That is, one of every four dollars in circulation is created in the last 12 months.

It is with Donald Trump in the White House, the governing body for an expansive policy based on direct payments from families and businesses, the increase in monetary mass, the maintenance of certain types of interest and the purchase of debt by the Federal Reserve.

His successor, Joe Biden, decided to maintain this policy and included it.

Biden is urging Congress to set a US $ 1.9 trillion estimate, which has led some economists to warn of a rise in inflation and the consequences it has for the recovery of the country.

But the most important question is why there is no inflation with all the money that has been issued in the last months.

The help of inflation

Lawrence Summers, Treasurer of the Treasury, who occupied many of the burdens on Bill Clinton’s governors in Barack Obama, recently published a column in the diary The Washington Post in the wake of the risk that Biden’s plan calls for “inflationary pressures never seen in a generation”.

Although the prices in general are well established, it is clear that there are some significant marketed experiments, such as the Wall Street stock market, where the SP500 index in the last 12 months has increased by more than 15%, including some less than 50% of that stock in March.

The real estate market, which has risen more than 11.6% in recent months, according to the index of living elaborate prices by the Préstamos Hypotecarios Corporation known as Freddie Mac.

Steve Hanke, Professor of Economics Applied to Johns Hopkins University in Member of the Council of Economic Assessors by President Ronald Reagan, told BBC Mundo that “inflation is coercive, it is the strength of the equine”.

Hanke signals that he has some precedents other than indicating a temporary change of pace, such as the crude and other fine materials.

The policy of types of interest cero, which will incentivize the activity, will also reduce the profitability of the money deposited in the banks, which is large amounts of money the bolsas and hacia assets of the mayor risk, increase in consequence of its value.

Hanke predicted that “when inflation rises, the Federal Reserve will enter panic and tend to subscribe to the types, which have a lot of money in the pocket”.

Why is it worth the dollar and how can it affect Latin America

The historical war of the ideas between economists and what affects the va gananda

But it is not the case that there are other economists out there who are not in charge of the Federal Reserve.

His director, Jerome Powell, stated in a recent intervention that it is possible that he will produce a record of the prices in the next months, except for the level of preoccupation.

If it happens, then the Federal Reserve will show “patient in its reaction”, indicating that it does not have a subsidy of the types of intermediates.

Powell’s speeches demonstrate the convincing conviction in Biden’s economic team that the momentum for the current economy is not an inflationary spiral, but an insufficient recovery.

The way in which it is conceived the flurry of inflation seems to have changed.

Paul Ashton, a United States Specialist analyst at Capital Economics Consultant, said that “although, including all of these estimates, the prices are in line with the latest year’s trend.”

“Between 2016 and 2019, the steady-state economy showed signs of slowing down, with a very low sample rate, and then inflation was relatively modest.”

According to Gita Gopinath, the International Monetary Fund’s economist, the Biden plan estimates that the Biden plan will increase prices by an inter-annual increase of 2.25% in 2022.

“Nothing to worry about”, says the FMI analyst.

Why inflation is not the main concern

In the last third of sail XX, much more has been said about the effects of the oil crisis of 1973, when the governing body was shown during the years unable to control the value of the prices.

But the collection of the prices in the last decades has changed this time, and it has been maintained systematically by debiting the 2% objective that the Federal Reserve has closed.

Therefore, while those responsible for designing economic policies, the problem has been more to impel the economic crime that has slowed down prices.

The conviction that there is no influential inflationary force has been installed on both sides of the political spectrum, and now Republicans and Democrats are in favor of the polls.

Everything has been animated by the governing body with all its artillery despots that hundreds of miles of companies are missing and many stadiums are losing their jobs on the coronavirus wave.

Entonces, ¿no pas nada?

All economic policies have their pros and cons. Biden’s governor is not the first to have to face a serious crisis that obliges him to prioritize.

The massive estimates in the United States have helped to keep the economy afloat, but over time it has been widening the deficit in its trade balance, the difference between what it exports and imports, as far as it shows the Treasury’s secretariat, Janet Yellen, y en lo que China parece estar tomando ventaja.

Ashton explains that “many services such as bars and restaurants are closed, and there are no imported consumer goods, while many electronic products have been purchased for Asia’s telecommunications industry.”

It is not the only risk. Ashton signals that if the increase in bursary assets increases, “we will assist the start of a market” in the markets.

But a continuation is asked: “What is the alternative to the Federal Reserve? ¿Amentar los tipos de intés y llevarnos’ n un desempleo mucho burgemeester? ”.

Yellen, part of a generation of market economists marketed by the hypocrisy of inflation controlled by the country in the 1970s, clears its post in a CNN interview.

“He spent many years studying inflation and preoccupation with inflation, but we are facing a huge economic downturn and a tremendous upheaval in the country. Tenemos que afrontar eso. Ese es el burgemeester riesgo ”.