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With all this money being created - why is there not more inflation?

 
Channing
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User ID: 2699208
Germany
10/06/2011 08:19 AM
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With all this money being created - why is there not more inflation?
I have been wondering recently - with all the central banks in the US and Europe creating so many billions to buy government bonds, why is there not more inflation?

Is the newly created money just staying in the banks?

Does anybody know the answer to this?
Anonymous Coward
User ID: 1419030
United States
10/06/2011 08:33 AM
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Re: With all this money being created - why is there not more inflation?
Velocity.
They keep the money supply limited. Never in history have we had push button cyber dollars.

They think that by keeping wages and supply low, they can keep inflation at bay.

A terrible experiment about to go horribly wrong.
Anonymous Coward
User ID: 2677827
Philippines
10/06/2011 08:40 AM
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Re: With all this money being created - why is there not more inflation?
The banks are holding the majority of it to preserve their capital structure, or lack thereof. They are not lending it out because the fundamentals for most who want the loans suck.

There is inflation out there in terms of energy and food. Don't believe the gov't CPI that they try to sell everyone on.
Abendigo72
User ID: 1481651
United States
10/06/2011 08:46 AM
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Re: With all this money being created - why is there not more inflation?
There's a lot of inflation in gold and silver markets ! The buggers have been roaring for years and years.

Other countries are starting to ditch the U.S. dollar, and the U.S. debt just got a downgrade.

You'll notice inflation in other countries before in America. Other countries will stop using dollars, so then it won't be worth as much. AFTER you see the inlfation of the American dollar in other countries, then you'll see it here in the USA
Anonymous Coward
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Canada
10/06/2011 09:02 AM
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Re: With all this money being created - why is there not more inflation?
One, they aren't really creating new money, contrary to what some goldtards claim.

Two, no velocity.

What we have is 'pseudo-inflation' where cheap credits and absurd margin requirements (brokerage account with $250K can borrow 10X that) so people borrow for cheap and buy up commodities futures and other speculative vehicles which drives up costs for basic products like oil, cotton, sugar, etc. It's driven by manipulation rather than good ole' supply and demand.