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To: exDemMom
I recall learning in history class that prices in California during the Gold Rush were incredibly high, compared to the rest of the country. Wasn't that also inflation?

I cannot say that I have studied this phenomenon. My instinct is that the rapid shift in population in that geographic area resulted in scarcity and therefore high prices. Inflation is the result of monetary policy, which results in higher prices. High price does not necessarily mean there is inflation.

8 posted on 11/25/2010 7:28:40 AM PST by frithguild (The Democrat Party Brand - Big Government protecting Entrenched Interests from Competition)
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To: frithguild

What they taught in history class (4th or 5th grade) was that people had so much gold, that prices skyrocketed. The examples of 1849 prices told to us then were higher than the prices we paid for the same items at the time I took that history class (ca. 1970). Currently, some items, like a loaf of bread, still have not reached their 1849 high, although coffee is more expensive now. So, it seemed to me to be more of a problem of inflation, and not scarcity. I could be wrong.


11 posted on 11/25/2010 7:59:08 AM PST by exDemMom (Now that I've finally accepted that I'm living a bad hair life, I'm more at peace with the world.)
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