Inflation is caused by the government

so??if its 5 or 2% and target is 2% its largely under control. A lack of control would be -10,000, +10,000 - 5000% + 5000% inflation etc etc Do you get it now??

 

LOL ridiculous - your argument is not based on economics, its simple blind faith in big govt, if the govt assigns it then it can be done, the Fed gets assigned the task of controlling inflation, therefore they can control inflation. By your belief then why worry about inflation, go for the real problems and assign the Fed the task of ending poverty, creating world peace, eliminating disease.

 

LOL that is utter nonsense. Complete rubbish.

You think that without the Fed "controlling" inflation it would be 10,000%? The Fed has only been in existence since the 1930's, inflation was never 5000% before then. You totally fail.

And you show your utter ignorance of economics and reality in thinking that its of no consequence that the govt is claiming inflation is 2% when it is really 5%. How old are you? Have you ever had a job and had to buy groceries?

 

it would depend on what system was in place in the absence of the Fed. Many many countries have had huge huge inflation. Do you understand?

Hungary: August 1945 - July 1946

flickr / Zoli Erdos


Daily inflation rate: 207 percent

Prices doubled every: 15 hours


Zimbabwe: March 2007 - November 2008

flickr / Peat Bakke


Daily inflation rate: 98 percent

Prices doubled every: 25 hours


Yugoslavia/Republika Srpska: April 1992 - January 1994

Wikimedia Commons


Daily inflation rate: 65 percent

Prices doubled every: 34 hours

Weimar Germany: August 1922 - December 1923

flickr / Comrade Foot


Daily inflation rate: 21 percent

Prices doubled every: 3 days, 17 hours

Greece: May 1941 - December 1945

flickr / Tilemahos


Daily inflation rate: 18 percent

Prices doubled every: 4 days, 6 hours

 

Yeah, but if you just vote in the right people, government will create a utopia!

 

The US was in a period of secular deflation for much of the 19th century, and yet the greatest economic growth was during that same time.

People always have a reason to buy. If anything, deflation makes low risk investment more palatable (you don't have to overcome inflation rates), thus leading to more incremental innovation.

 

1670-1770
1850-1900

After that, most countries have gone to fiat currency and monetary central planning, thus focusing on inflation as a means to finance government debt.

We would be in a major period of deflation now, if it weren't for that monetary central planning. Prices on goods are dropping like stones as productivity increases. However, we mere mortals can't take advantage of that because government needs massive welfare and warfare expenditures.

 

Fiat currencies inevitably collapse. None in history have lasted longer than 8 decades. The current (and 3rd attempt) US fiat money has gone for 45 years.

 

most major countries have fiat currency now and economies are more stable than ever so no worries. Knowledge of monetary policy is far greater than ever now and seems to have weathered every crisis thrown at it. Most importantly, whether you have a gold or fiat standard does not matter, what does matter is the level of monetary knowledge you have and how you use it to manage a gold or fiat standard. Too complicated??

 

you said many periods of deflation in American history that proved deflation does not lead to recession???? I asked for best example and you say 1670-1770 before country was even formed??????
1) who exactly was measuring for 2 quarters of GDP decline in 1670 so you know the was no recession???
2) best records from period show 8% deflation over 100 years which is very very trivial by any standards.

Massive liberal failure to think as per usual!!!



$100 in 1670 → 1770 | Inflation Calculator
www.in2013dollars.com › U.S. dollars › 1670 › 1770 value
The U.S. dollar experienced an average deflation rate of 0.08% per year between 1670 and 1770. $100 in the year 1670 is worth $92 in 1770

 

We want stable prices so we can comparison shop and get best value for each dollar or a higher standard of living for each dollar. If prices are dropping randomly and unevenly in different parts of economy due in part to monetary policy we cant tell when they drop due to production efficiency increases thus efficiency is not rewarded and we get inefficiency and a lowered standard of living.

And this is not to mention that significant deflation causes depression as there is no reason to buy anything today if it will be cheaper tomorrow or next year. Econ 101!

 

Totally irrelevant. Mind numbingly irrelevant.

The USA did not have the Fed before 1913, and the Fed did not have any actual power until the USA went off the gold standard in 1933. For about 250 years before 1933, the "new world" did not have the Fed and had many periods of inflation and deflation, all ranging between +40% and -20%. After the Fed, there have been 5 periods of deflation.

The USA (colonies, "new world") did not suffer "10,000%" inflation or any of your utterly bizarre claims before the Fed. Go take a class on economics. For a while you were embarrassing yourself, but now its gotten so bad you are embarrassing the forum.

 

Prior to 1913 there were instances of high inflation not shown on the line graph, such as the period between 1848 and 1855 when much new money was being created in California. From our founding up to 1913 money had tangible value and monetary inflation was the result of labour discovering and extracting gold and/or silver from newly discovered sources. As a result inflation occurred greatly and rapidly in the local area where this happened, not having a great effect on consumers as a whole.
Fiat currency can be produced without constraint, and the amount on the books is a continuous growing figure as a result of interest. The actual amount of fiat currency in existence is but a small fraction of what is recorded in the books and need only be adequate to meet the demands of daily cash spending. New money only needs to be printed to ward off massive withdrawals of savings in cash from banks as they individually and collectively have far less hard cash than what is recorded in their books.
Low interest rates result in slower growth of the numbers in the books while high interest rates result in more rapid growth of the numbers in the books. As such, money is constantly increasing causing constant inflation and the Fed can only control the rate of INCREASE which is a bubble under which we who use dollars all live and are affected by.
While the massive inflation which occurred locally during the period of the California gold rush did not create high inflation nationally, massive deflation occurred locally afterwards allowing a bubble to inflate and then deflate naturally without government intervention.

 

Define stability.

The faith and hubris of the central planning minded. We can just go on indebting forever. it's working now, right? Our glorious leaders haven't screwed things up too badly yet, right?

Maybe the government shouldn't be in the business of managing money. I tell you what, how about we eliminate legal tender laws that give governments a monopoly on money and see what happens? Oh, we are seeing what happens now, with Bitcoin as becomes more and more prominent (and it's still deep in shadows.) If monetary central planners are so masterful, why are they seeking more and more restrictions over the free market currency?

 

Any downturn in the economy prior to 1913 can be directly attributed to government meddling. Major economic upheavals, including economy-wide recessions, are always the result of governemnt interference.

 

Speaking of failure to think, why do you refer to me as a "liberal", and by "liberal", what exactly do you mean? I do find it the height of hypocrisy to accuse me of lacking in thinking when it's you resorting to epithets.

You asked for deflation. By the way, measuring over a period of 100 years indicates very little in the changes over time. One can get a very stable result measuring from 1776 to 1900, but if you really want to find the rigors of inflation, one needs to go for much smaller periods, such as between 1860 and 1872. You know, when the 2nd US fiat money needed to be propped up before it completely crumbled and the first legal tender laws are upheld (after being overturned) by the SCOTUS.

 

wrong !!! you said there were many many examples of deflation not leading to recession. I asked for best example and you picked 1670-1770, a time when deflation was almost 0 and when there was no govt measuring for 2 quarters of economic decline!! So you have no examples. Have you learned your lesson?

 

so then why did you pick it as your very best example and now admit it indicates very little???????

 

no idea what your subject is or what your point is. Can you tell us? Did I say I wanted to find the "rigors" of inflation??

 

What lesson? That you move the goalposts. You haven't even proved that deflation causes recession. Rather, it's a symptom of recession.

One doesn't succeed in life by learning from those with incorrect information.

 

There's thing that you can find just about anywhere, and very easily online. It's called a "dictionary." Here's the definition of rigor:

rigor

• 
  A harsh or trying circumstance; hardship. See Synonyms at difficulty.

And no, I think you wanted to misinform, using your misinformation, as you usually do, in order to belabor your already mistaken assertions.

 

In one case it was actually a period of deflation. In your case, it was a period that was completely arbritrary and says nothing. I am not surprised that you cannot tell the difference.

By the way, are you ever going to explain why you keep referring to me as liberal? Or are you just going to keep tossing out those pathetic little epithets?

 

for 4th time: you said there were many examples of when deflation did not lead to recession. I ask for one example and you have failed to present it despite 4 trys. Care to admit you were BSing and got caught?

 

if a conservative/libertarian assertion is mistaken why so afraid to identify that assertion and tell us why it is mistaken?????

 

When a "conservative" neo-chartalist accuses a libertarian of being a "liberal"...