Ray Dalio, self made billionaire/investor has long pushed the idea we are still in a phase of economic recovery characterized by a balancing act between inflation and deflation in order to return to a level of where valuation of fundamental sectors of our economy, such as real estate, finally touch down back on earth and return to the realm of real valuations.
The lack of inflation is coupled with the lack of real growth due to high unemployment, but also, banks have gambled with the fed money rather than make loans to stimulate the economy. They have some explaining to do.
Banks aren't borrowing money from the Fed.
rather than make loans to stimulate the economy.
Banks are capital constrained, they can't simply make a lot of additional loans.
Would you elaborate on this? Specifically the bit about the gambling banks. How can they gamble without loaning or spending their Fed cash?
I am stuck on the problem of massive printing by the Fed with the money going, I assume, to the banks and the Federal Government - but with very low associated inflation. Not as low as advertised but still lower than expected given the Fed printing frenzy. For me it just doesn't add up. Where is all that money? And why don't we see inflation from the Federal Government spending beyond their means with the Fed Monopoly Money?