Fed insider – Danielle DiMartino
inflation or deflation

Fed insider – Danielle DiMartino

Will do my best to write a short summary of this video for the things I find important:

Danielle DiMartino was working for the FED in Dallas.

  • @ 7min What happens is that the FED makes the biggest companies bigger and because the FED fosters monopolization of US economy it ends up stifling innovation it ends up killing the ability to be an entrepreneur and you take the wind out of the American dream of anybody being able to start a business because its much harder to do if you live in a monopolized economy which is something that the FED has FED.
  • @8min Zombie companies have grown from 15% to 20% during the COVID pandemic.
  • The more debt you pile up the less value you can extract in the end.
  • Just because the company goes bankrupt doesn’t mean the jobs go away they just get reordered. And they get rid of the debt. And a new company can be born.
  • @20min Washington has effectively introduced socialism into the U.S. economy with the stimulus bill. And now that workers in the economy have gotten a flavor for what 2400 extra dollars a month feels like they are like I like this universal income let’s get some more of it.
  • The FED has destroyed price discovery. What this means is that the market isn’t free. Its manipulated.
  • @33:20 Technology is and should be deflationary. We make things easier to make and it’s deflationary. And for me, it seems like deflation is a really good thing. Do I want my dollars to buy more things in the future or less?
  • The idea of borrowing and living beyond your means. This is one of the things that has to be expunged or our fate as a nation is at risk.
  • When you have a too high of income inequality problems start to arise. And you can be certain that an extremist leader will arise to help the people. Like in Venezuela.
  • Education is the most important. The food that we eat our medicine that we take everything always boils down to education. The system has intentionally created a bunch of victims. Like hey, you can’t get ahead because you are poor, black or a woman, etc. And now that you become a victim now you are looking for a savior instead of empowering people.
  • @40 If the state is going to keep us from every virus, sickness, and every poorness and every all these things well shoot, just put me in a cage and give me a steak once a day and I’m good right. Like a lion in a cage. I won’t roam the plains because that’s a hard life on the plains. Sometimes I don’t eat I have other animals and hunters trying to kill me. So just put me in a cage and give me a steak every day and keep me safe.

End game:

For the end game to work which is a debt jubilee(where all debt gets written off). You have to have all countries to agree and at last check, not all countries in the world are our allies and that is really the discussion that I think brings us to what the end might or might not look like. And you recall from history that every time a reserve currency status has been lost there’s a war involved and that is really my greatest fear. Its that we keep the money printing going the genesis of every world war in history has always been economical in nature and triggered by something debt-related.

If the kumbaya is a debt jubilee and all the countries in the world are going to agree to expunge all their sovereign debts wipe the slates clean forgive and forget everything. In order for that to work, you have to have every single country agree with the USA.

Inflation or Deflation?

The FED is trying really really hard to Engineer inflation. They are even buying Treasury inflation-protected securities to push up inflation expectations by force.
However, a million new filers of initial claims every week dictate that you are going to have deflation take hold if there’s not some kind of magnificent economic recovery in the offing. Which is going to be very difficult to do given the fact that debt got us in this situation in the first place and debt by definition is a drag on economic activity and a drag on the economy to achieve exit velocity. We can even have negative rates in a while which will dictate the market. That would be very daunting for the FED because that would reveal that they had lost the battle. The inflation-deflation battle. But you can only take so many people out of the workforce which kills pricing power and hold of deflation for so long.

So inflation or Deflation?

I think we will have deflation first if we try and keep printing printing printing. It depends who’s going to be in Washington if they ever change the FED mandate and allow the FED instead of buying Treasuries in the secondary market to actually buy treasuries at auction such that the FED is basically the FED’s liabilities are legal tender, then you can flip the mother of all inflation switches.

We have 10-20% of the workforce out of the workforce. I’m sorry but even a monkey can tell you that this is deflationary. Money printing is inflationary. You just have to assign odds.

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