What's inflation?

Town Hall ^ | November 16, 2005 | Walter E. Williams

[GSlob]

When I find one, I will not be reporting back. You'll find about it in the newspapers.

[Sonny M]

Where did you get the word "normalcy" from?

[null and void]

*shrug* I believe in the physical reality of production.

[DarthVader]

"What's inflation?"

John Kerry's opinions of himself.

[Casloy]

Inflation is what you get when you elect an idiot president. Oh....say.....someone like Jimmy Carter.

[Paul Ross]

Heh. It certainly is a tempting belief....

[null and void]

Especially for an engineer...

[Sonny M]

In an interesting development, the Fed has decided that the amount of new M3 money doesn't matter any more, and so they are no longer going to provide statistics on new M3.

I thought it was odd they decided to stop putting out the stats for that.

Granted, you can figure it out on your own, if inclined too, but why make extra work when the FED could just provide it?

If its important to someone, they can and will be able to figure it out, but whats the point of just removing it?

Its like a baseball team refusing to give out batting averages, but giving the relevent numbers (hits and abs) to get it anyhow.

[Da Bilge Troll]

The form that money takes is irrelevant. The number of dollars in the economy, virtual or otherwise, is a creation of government while GDP is a measure of actual wealth.

[Toddsterpatriot]

Or, we keep the supply as is and sink the population into poverty.

Reduced supply (of imports) with the same money supply is inflationary.

[Oberon]

The form that money takes is irrelevant. The number of dollars in the economy, virtual or otherwise, is a creation of government while GDP is a measure of actual wealth.

Granted. But how does one figure "the number of dollars in the economy" when many if not most of those dollars are simply numbers in computers?

I don't mean to go all existential on you. I just find it confusing.

I had the same conundrum in my career as a technical writer. Much of my output was never printed; it went straight to PDF files or HTML to post to the web. I rarely if ever made an actual thing you could hold in your hand, although I wrote and edited quite a few documents. Someone asked me what I did for a living about this time.

I told him "I rearrange electrons."

[Sonny M]

Reminds of an analogy my old prof once gave of "if you really own that money in your pocket, trying going outside in front of the feds and setting it on fire".

He followed it up by how it was different from private property like your home.

Today I kind of chuckle thinking of the kelso decision and what anaology he uses now.

[Travis McGee]

What does our Constitution say about money? Remember, our FF knew all about deflation, hyperinflation, fiat currency etc. They had just lived through it!

Section. 8. Clause 2: To borrow Money on the credit of the United States;

Clause 5: To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

Section. 10. Clause 1: No State shall ... coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;

[Travis McGee]

I can hardly wait.

[Jason_b]

Stock? Except that a company issues stock and hopes someone will buy it. No one is compelled to. But we are compelled to accept FRNs as legal tender. That makes it something different.

Under the money act of 1792, your real work would be paid for in real metal you would hold yourself, privately.

Today, your real work is paid for in symbolic money which means the central bank holds your pay in a constructive trust for you. Your money is not your pay. Your money is not even yours. But are tokens representing your share in the trust pool of tickets. Worse, all the tickets are lent to someone so they represent interest bearing debt, either to an individual or the government. Williams article is a good one because it warns us that we cannot trust the central bank to protect the purchasing power of the tickets.

You can get a portion of your wealth out of the trust by selling some FRNs for gold and holding it privately. This action severs your involvement with the CB to the extent you choose not to employ them as wealth trustees for your estate.

[CodeToad]

I get a sinking feeling everytime I see the feds rearrange the deck chairs.

[cynicom]

This country is propelled by debt, expansion and inflation. Stop any one of them and the Great Depression will look like a cakewalk.

[ex-snook]

To answer 'what is inflation' one should first consider why there is inflation. If there was no benefit, there would be no inflation. Who benefits? Debtors. Who is the biggest debtor? The Government.

Is there any doubt on how the government plans on dealing with huge debt? It is not going to paid off with taxes or production. Count on inflation.

President Bush is passing this hot potato to successors. And if the government can't inflate because of international competition, the SHWHTF [last word fan].

[cynicom]

The guys rearranging the deck chairs keep their place close by the lifeboats. We steerage capitalists will go down with the ship as usual.

[Jason_b]

There will always be people willing to lend money even if it is only in the form of gold coins. They will be those who consume less than they produce. What we should like to see less of is illicit credit that exists as a result of monopoly privileges to issue a sovereign nation's money supply.