Surprise surprise inflation exists! Moreover, this self-imposed shock via stimulus checks has had larger implications. Who is the single largest debtor in the world? US Government. What does an inflation shock do? Rubs the nominal creditor to benefit the nominal debtor. This is the biggest inflation shock in 40 years.
Debtors include US corporations who loaded up massively on debt to prepare for buy-backs. EZ and ECB with pretty much the same vibe. How big was the theft? For USTs alone the Fed’s own economists estimate it at 3.3% of GDP, the largest in history! That obviously doesn’t even include corporate debt. Who are the ones that got screwed? Split is simple 40% foreign / 60% US HH. The sheer size of the theft is unsurprising given how the UST market ballooned over the recent decades. Also shows the other side of the marginal $ no longer being a valid reserve argument.
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