I’m trying to keep an open mind and make some sense of what is going on. I understand the FED’s role to inspire trust and their tools are printing money and (in the worst case) freezing accounts. They are sort of an extension of the Bank of America. As it runs a very large deficit, the FED runs inflation to help erode this debt. So far I understand the mechanisms.

But we are now facing an anomaly that will affect the real world. What I see is that savings are running to speculation (stockmarket, Bitcoin) and relatively safe (read — physical) havens like gold, real estate and even art. I also see that investments are being postponed and real out-put is failing.

When the money press stops, many firms and individuals will go bankrupt. As trust erodes, interest rates go up. But to what point can the FED keep pumping money into the system to prevent them from rising to high too fast?

Unless (A.) the money goes straight to these failing parties the bankruptcies will continue. This is the point Steve is making. State-controlled business and individuals…I think it’s fair to call that communism — so that certainly will never happen in the US. The elites will never allow it because once that taste is acquired the genie is then out of the bottle…

The two other (Keynes like) alternatives for creating mass employment are (B.) war (most probably on Iran which still has large reserves) or (C.) state-driven investments (like in the Green New Deal) — which would be a socialist act:) If not, then the bankruptcies will lead to liquidations (we are back in the real world of assets sale) and prices will drop…

Also how much more money can the FED’s inflate the system with before the lenders start to losing faith in the value of the dollar? As the dollar has lost much of its geopolitical power, the Euro and Yuan are now viable alternatives. If that happens, then imports will halt, seriously disrupting manufacture (the price of globalisation) and it will take decades to re-balance domestically.

Maintaining trust in the US (dollar) is also the reason I doubt that this administration will go to war. Deflation on the other hand (D.) is (in the short term) good for the elite and to maintain “trust” in the value of the dollar. It will put even more of America directly into the hands of the elite and big corporations. Which is very tempting…

So perhaps first a bit of D then a drop of C? But I just don’t see inflation happening in either scenario.

But I’m just a real-world engineer and quite at a loss when it comes down to belief and social systems like money and power manipulations over it.