Consider the abundance of evidence we have about money printing...

Consider the abundance of evidence we have about money printing causing inflation. The US has been printing money by the trillions since 2008. Have we seen evidence of inflation? Have we seen the US$ devalued to be worthless? No, money printing does not "cause" inflation. And interest payments on QE do not cost anything because the interest payments are returned as dividends to the treasury.

So why is there now inflation? Strange isn't that it coincides with COVID causing supply side constraints. So yes, if demand exceeds supply there is pressure on prices - inflation. But it matters how the money is spent. US QE simply increased asset prices due to a combination of low interest rates and funneling the money to banks rather than putting the money into the productive economy. Some has trickled through to the real economy. During COVID saving rates dramatically increased and the pool of savings is still to spent. That has kept the economy buzzing to such an extent that interest rates have had to be raised. In Australia, which has had the highest immigration rate of any developed country, immigration stopped. Some people dropped out of the workforce further decreasing the availability of labour. Even with that inflation is most with imported products, not wages.

So what happens when the savings run out? The economy will cool. Some people will be stressed with mortgage repayments. Some people will have trouble paying the rent as landlords put rents up. There will be less money circulating, and there could be a recession. But the evidence is still thin. House prices have hardly fallen and the job market is strong. If central banks keep raising rates there has to be a point where the economy will go backwards.

I have no money in the market at the present time as it could be at a decision point. If it decides to go south I will short, but it decides to continue north I will go long again.