{"id":2329,"date":"2020-07-07T15:36:57","date_gmt":"2020-07-07T15:36:57","guid":{"rendered":"http:\/\/1db-blog.1db.com\/?p=1669"},"modified":"2020-09-11T14:44:59","modified_gmt":"2020-09-11T14:44:59","slug":"a-10-trillion-rescue-package-will-it-ignite-inflation","status":"publish","type":"post","link":"https:\/\/beta.1db.com\/?p=2329","title":{"rendered":"A $10 Trillion Rescue Package: Will it Ignite Inflation?"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

\u201cInflation is always a monetary phenomenon that occurs by a rapid increase in the quantity of money.\u201d \u2014Milton Friedman<\/em> (Nobel Prize Recipient)<\/span><\/p><\/blockquote>\n\n\n\n

Inflation averaged 3.2% since 1914; today it sits anchored at .2%. There have been episodes of high inflation rates over the past half-century stemming from excess liquidity. Money supply growth (blue line) has risen by double-digit rates; this, at times, has sparked bouts of inflation. <\/em>In 2020, money supply (M2), comprising cash, checking accounts, and savings accounts has swelled a whopping 23%, from $14.4 to $17.9 trillion, a $3.3 trillion increase, whew! The surplus in liquidity has been a boon for investors owning financial assets. <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Historically, a substantial increase in the money supply, as measured by the monetary aggregate M2<\/a>, has accompanied elevated periods of rising costs<\/a>. Monetarists <\/a>suggest that the money supply is a primary factor influencing demand in the economy. Keynesian <\/a>theorists advocate that stimulative fiscal policy is essential to curtail job destruction and reignite economic activity, after an exogenous shock. Covid19 has squeezed supply chains and seized consumer spending, sending our economy into a sharp recession. The federal government unleashed $10 trillion in fiscal stimulus and central bank monetization<\/a> to address the coronavirus economic storm,<\/p>\n\n\n\n

According to Yogi Berra, “a nickel ain’t worth a dime anymore<\/em>” was his novel way of saying that a rapidly rising inflation rate is undesirable. Presently, financial markets, analysts, economists, politicians, and the Fed, do not foresee inflationary headwinds. However, if the $10 trillion<\/a> and counting rescue package proves to be more than was necessary to resuscitate the Covid19 recession, and the economy picks up steam faster than is expected, perhaps then we may have a new problem, Inflation<\/a>!<\/p>\n\n\n\n

Savvy market participants are keen to keep their eyes focused on the rising prices of goods and services and potential threats to their fixed income holdings, particularly long-dated bonds. One thing that is promising occurring from an inflation bout is that it makes it easier for the federal government to service its<\/a> debts <\/a>by collecting higher taxes and draconian indexing.<\/p>\n\n\n\n

Important Disclosures<\/strong> Any views, thoughts, and opinions pertaining to the subject matter presented in this post are solely the author\u2019s subjective opinions and do not reflect the official policy or position of 1st Discount Brokerage, Inc. Information is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Past performance is no guarantee of future results. Any examples, outcomes, or assumptions expressed within this article are only hypothetical illustrations and should not be utilized in real-world analytic products as they are based only on very limited and dated open source information. Dollar-cost averaging, diversification, and rebalancing strategies do not assure a profit or protect against losses in declining markets. Asset allocation and diversification do not ensure or guarantee better performance and cannot eliminate the risk of investment losses in declining markets. Assumptions made within the analysis are not reflective of 1st Discount Brokerage, Inc. nor its personnel. 1st Discount Brokerage, Inc. is a licensed FINRA broker-dealer and Registered Investment Advisor. Securities offered through 1stDiscount Brokerage, Inc., Member FINRA\/SIPC.<\/p>\n","protected":false},"excerpt":{"rendered":"

\u201cInflation is always a monetary phenomenon that occurs by a rapid increase in the quantity of money.\u201d \u2014Milton Friedman (Nobel Prize Recipient) Inflation averaged 3.2% since 1914; today it sits anchored at .2%. There have been episodes of high inflation rates over the past half-century stemming from excess liquidity. Money supply growth (blue line) has…
Continue A $10 Trillion Rescue Package: Will it Ignite Inflation?<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[33],"tags":[11,30,31,32],"class_list":["post-2329","post","type-post","status-publish","format-standard","hentry","category-https-fred-stlouisfed-org","tag-10-year-bonds","tag-bond-bubble","tag-bond-bust","tag-inflation"],"acf":[],"yoast_head":"\nA $10 Trillion Rescue Package: Will it Ignite Inflation? - Financial Advisors<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/beta.1db.com\/?p=2329\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A $10 Trillion Rescue Package: Will it Ignite Inflation? - Financial Advisors\" \/>\n<meta property=\"og:description\" content=\"\u201cInflation is always a monetary phenomenon that occurs by a rapid increase in the quantity of money.\u201d \u2014Milton Friedman (Nobel Prize Recipient) Inflation averaged 3.2% since 1914; today it sits anchored at .2%. There have been episodes of high inflation rates over the past half-century stemming from excess liquidity. Money supply growth (blue line) has...Continue A $10 Trillion Rescue Package: Will it Ignite Inflation?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/beta.1db.com\/?p=2329\" \/>\n<meta property=\"og:site_name\" content=\"Financial Advisors\" \/>\n<meta property=\"article:published_time\" content=\"2020-07-07T15:36:57+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-09-11T14:44:59+00:00\" \/>\n<meta property=\"og:image\" content=\"http:\/\/1db-blog.1db.com\/wp-content\/uploads\/2020\/07\/image-5-1024x601.png\" \/>\n<meta name=\"author\" content=\"chip\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"chip\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/beta.1db.com\/?p=2329#article\",\"isPartOf\":{\"@id\":\"https:\/\/beta.1db.com\/?p=2329\"},\"author\":{\"name\":\"chip\",\"@id\":\"https:\/\/beta.1db.com\/#\/schema\/person\/dc3029c7b01df457c040e4fceac14b5c\"},\"headline\":\"A $10 Trillion Rescue Package: Will it Ignite Inflation?\",\"datePublished\":\"2020-07-07T15:36:57+00:00\",\"dateModified\":\"2020-09-11T14:44:59+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/beta.1db.com\/?p=2329\"},\"wordCount\":532,\"image\":{\"@id\":\"https:\/\/beta.1db.com\/?p=2329#primaryimage\"},\"thumbnailUrl\":\"http:\/\/1db-blog.1db.com\/wp-content\/uploads\/2020\/07\/image-5-1024x601.png\",\"keywords\":[\"10 Year Bonds\",\"Bond Bubble\",\"Bond Bust\",\"Inflation\"],\"articleSection\":[\"Macroeconomics\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/beta.1db.com\/?p=2329\",\"url\":\"https:\/\/beta.1db.com\/?p=2329\",\"name\":\"A $10 Trillion Rescue Package: Will it Ignite Inflation? - Financial Advisors\",\"isPartOf\":{\"@id\":\"https:\/\/beta.1db.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/beta.1db.com\/?p=2329#primaryimage\"},\"image\":{\"@id\":\"https:\/\/beta.1db.com\/?p=2329#primaryimage\"},\"thumbnailUrl\":\"http:\/\/1db-blog.1db.com\/wp-content\/uploads\/2020\/07\/image-5-1024x601.png\",\"datePublished\":\"2020-07-07T15:36:57+00:00\",\"dateModified\":\"2020-09-11T14:44:59+00:00\",\"author\":{\"@id\":\"https:\/\/beta.1db.com\/#\/schema\/person\/dc3029c7b01df457c040e4fceac14b5c\"},\"breadcrumb\":{\"@id\":\"https:\/\/beta.1db.com\/?p=2329#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/beta.1db.com\/?p=2329\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/beta.1db.com\/?p=2329#primaryimage\",\"url\":\"http:\/\/1db-blog.1db.com\/wp-content\/uploads\/2020\/07\/image-5-1024x601.png\",\"contentUrl\":\"http:\/\/1db-blog.1db.com\/wp-content\/uploads\/2020\/07\/image-5-1024x601.png\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/beta.1db.com\/?p=2329#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/beta.1db.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"A $10 Trillion Rescue Package: Will it Ignite Inflation?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/beta.1db.com\/#website\",\"url\":\"https:\/\/beta.1db.com\/\",\"name\":\"Financial Advisors\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/beta.1db.com\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/beta.1db.com\/#\/schema\/person\/dc3029c7b01df457c040e4fceac14b5c\",\"name\":\"chip\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/secure.gravatar.com\/avatar\/85a131a6d44701b22caf713c3e8421d2905b429f04224c738ab5e95de3d81845?s=96&d=mm&r=g\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/85a131a6d44701b22caf713c3e8421d2905b429f04224c738ab5e95de3d81845?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/85a131a6d44701b22caf713c3e8421d2905b429f04224c738ab5e95de3d81845?s=96&d=mm&r=g\",\"caption\":\"chip\"},\"url\":\"https:\/\/beta.1db.com\/?author=3\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"A $10 Trillion Rescue Package: Will it Ignite Inflation? - Financial Advisors","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/beta.1db.com\/?p=2329","og_locale":"en_US","og_type":"article","og_title":"A $10 Trillion Rescue Package: Will it Ignite Inflation? - Financial Advisors","og_description":"\u201cInflation is always a monetary phenomenon that occurs by a rapid increase in the quantity of money.\u201d \u2014Milton Friedman (Nobel Prize Recipient) Inflation averaged 3.2% since 1914; today it sits anchored at .2%. There have been episodes of high inflation rates over the past half-century stemming from excess liquidity. Money supply growth (blue line) has...Continue A $10 Trillion Rescue Package: Will it Ignite Inflation?","og_url":"https:\/\/beta.1db.com\/?p=2329","og_site_name":"Financial Advisors","article_published_time":"2020-07-07T15:36:57+00:00","article_modified_time":"2020-09-11T14:44:59+00:00","og_image":[{"url":"http:\/\/1db-blog.1db.com\/wp-content\/uploads\/2020\/07\/image-5-1024x601.png","type":"","width":"","height":""}],"author":"chip","twitter_card":"summary_large_image","twitter_misc":{"Written by":"chip","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/beta.1db.com\/?p=2329#article","isPartOf":{"@id":"https:\/\/beta.1db.com\/?p=2329"},"author":{"name":"chip","@id":"https:\/\/beta.1db.com\/#\/schema\/person\/dc3029c7b01df457c040e4fceac14b5c"},"headline":"A $10 Trillion Rescue Package: Will it Ignite Inflation?","datePublished":"2020-07-07T15:36:57+00:00","dateModified":"2020-09-11T14:44:59+00:00","mainEntityOfPage":{"@id":"https:\/\/beta.1db.com\/?p=2329"},"wordCount":532,"image":{"@id":"https:\/\/beta.1db.com\/?p=2329#primaryimage"},"thumbnailUrl":"http:\/\/1db-blog.1db.com\/wp-content\/uploads\/2020\/07\/image-5-1024x601.png","keywords":["10 Year Bonds","Bond Bubble","Bond Bust","Inflation"],"articleSection":["Macroeconomics"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/beta.1db.com\/?p=2329","url":"https:\/\/beta.1db.com\/?p=2329","name":"A $10 Trillion Rescue Package: Will it Ignite Inflation? - Financial Advisors","isPartOf":{"@id":"https:\/\/beta.1db.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/beta.1db.com\/?p=2329#primaryimage"},"image":{"@id":"https:\/\/beta.1db.com\/?p=2329#primaryimage"},"thumbnailUrl":"http:\/\/1db-blog.1db.com\/wp-content\/uploads\/2020\/07\/image-5-1024x601.png","datePublished":"2020-07-07T15:36:57+00:00","dateModified":"2020-09-11T14:44:59+00:00","author":{"@id":"https:\/\/beta.1db.com\/#\/schema\/person\/dc3029c7b01df457c040e4fceac14b5c"},"breadcrumb":{"@id":"https:\/\/beta.1db.com\/?p=2329#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/beta.1db.com\/?p=2329"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/beta.1db.com\/?p=2329#primaryimage","url":"http:\/\/1db-blog.1db.com\/wp-content\/uploads\/2020\/07\/image-5-1024x601.png","contentUrl":"http:\/\/1db-blog.1db.com\/wp-content\/uploads\/2020\/07\/image-5-1024x601.png"},{"@type":"BreadcrumbList","@id":"https:\/\/beta.1db.com\/?p=2329#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/beta.1db.com\/"},{"@type":"ListItem","position":2,"name":"A $10 Trillion Rescue Package: Will it Ignite Inflation?"}]},{"@type":"WebSite","@id":"https:\/\/beta.1db.com\/#website","url":"https:\/\/beta.1db.com\/","name":"Financial Advisors","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/beta.1db.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/beta.1db.com\/#\/schema\/person\/dc3029c7b01df457c040e4fceac14b5c","name":"chip","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/85a131a6d44701b22caf713c3e8421d2905b429f04224c738ab5e95de3d81845?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/85a131a6d44701b22caf713c3e8421d2905b429f04224c738ab5e95de3d81845?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/85a131a6d44701b22caf713c3e8421d2905b429f04224c738ab5e95de3d81845?s=96&d=mm&r=g","caption":"chip"},"url":"https:\/\/beta.1db.com\/?author=3"}]}},"_links":{"self":[{"href":"https:\/\/beta.1db.com\/index.php?rest_route=\/wp\/v2\/posts\/2329","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/beta.1db.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/beta.1db.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/beta.1db.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/beta.1db.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2329"}],"version-history":[{"count":1,"href":"https:\/\/beta.1db.com\/index.php?rest_route=\/wp\/v2\/posts\/2329\/revisions"}],"predecessor-version":[{"id":2345,"href":"https:\/\/beta.1db.com\/index.php?rest_route=\/wp\/v2\/posts\/2329\/revisions\/2345"}],"wp:attachment":[{"href":"https:\/\/beta.1db.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2329"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/beta.1db.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2329"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/beta.1db.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2329"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}