That works out to 2.06% a year. That's not "igniting".
I'm old enough to have seen 14% per year inflation in the 1970s, so 2% doesn't impress me as inflation igniting. More to the point... where's the inflation from QE in 2008? It, um, never really showed up. We continued creeping along at 2% a year, sometimes less. So I'd regard that as experimental refutation of the "Fed printing money, so inflation is going to ignite" thesis.
More precisely, I think the Fed printing money can ignite inflation, if they print more than the economy grows. In 2008, they didn't do that with QE. They created $4 trillion, which almost exactly offset the $4 trillion that vaporized in the crash, and the result was that we avoided another Great Depression without igniting inflation. The Covid crisis... well, it's too early to tell, but they might pull off the same feat.
2% inflation per year since 2000 is evidence of great stability, not of out-of-control Fed money printing.
It's not that much that stock market is up, it's value of dollar quietly sliding.
Stock market auto-adjusts.
Inflation is the hidden tax. Instead of loudly imposing new or higher taxes, government is quietly printing money. Same result for citizens - their buying power is less.
AnimalMuppet|5 years ago
I'm old enough to have seen 14% per year inflation in the 1970s, so 2% doesn't impress me as inflation igniting. More to the point... where's the inflation from QE in 2008? It, um, never really showed up. We continued creeping along at 2% a year, sometimes less. So I'd regard that as experimental refutation of the "Fed printing money, so inflation is going to ignite" thesis.
More precisely, I think the Fed printing money can ignite inflation, if they print more than the economy grows. In 2008, they didn't do that with QE. They created $4 trillion, which almost exactly offset the $4 trillion that vaporized in the crash, and the result was that we avoided another Great Depression without igniting inflation. The Covid crisis... well, it's too early to tell, but they might pull off the same feat.
2% inflation per year since 2000 is evidence of great stability, not of out-of-control Fed money printing.
Trias11|5 years ago
Inflation is the hidden tax. Instead of loudly imposing new or higher taxes, government is quietly printing money. Same result for citizens - their buying power is less.