tag:blogger.com,1999:blog-6276561747841568697.post3740196573502875848..comments2024-03-27T05:23:48.855-04:00Comments on Krugman-in-Wonderland: Heading for double-digit inflation?William L. Andersonhttp://www.blogger.com/profile/01802990642236807359noreply@blogger.comBlogger42125tag:blogger.com,1999:blog-6276561747841568697.post-12723733863680352002012-03-20T10:14:27.554-04:002012-03-20T10:14:27.554-04:00Zachriel:
Major_Freedom: You seriously need to im...Zachriel:<br /><br /><i>Major_Freedom: You seriously need to improve your memory.</i><br /><br /><i>Major_Freedom: A much better metric is to compare the price of oil to the price of gold.</i><br /><br /><i>Which we did above.</i><br /><br />You arbitrarily said a factor of 2 in volatility of the price of oil in gold is "hardly stable."<br /><br />And yet the price of oil in dollars has fluctuated by up to factor of 13 ($10 price in early 1970s, and $130 in 2008).<br /><br />Gold price of oil is far LESS volatile than dollar price of oil.<br /><br />If you go by volatility, gold is far superior to dollars.<br /><br /><i>Major_Freedom: Since 2009, the price of gasoline in terms of gold has remained flat. that means that the recent run up in gasoline prices is due primarily to inflation of the money supply.</i><br /><br /><i>Notably, you ignored the wild fluctuations in 2008.</i><br /><br />That's because it was AFTER 2008 that the Fed engaged in massive inflation.<br /><br /><i>But yes, inflationary pressure is part of the picture, not just monetary expansion, but a hedge against future monetary expansion.</i><br /><br />It's the major part of the picture.<br /><br /><i>Major_Freedom: I shouldn't have to do that once I have already established my definition.</i><br /><br /><i>The proper use of the term was established in the original post which concern the proper measure of price inflation.</i><br /><br />No, I already established my definition of inflation. Calling your definition "proper" is not going to make my definition wrong. Definitions can't be wrong. Only substantive arguments can be wrong.<br /><br />I use the original definition of inflation, and I am not about to stop using it, so at some point you're going to have to address my arguments given the definitions I use, rather than having tremendous difficulty doing some basic translating of words into your own language as you go along.Major_Freedomnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-60734787401795365552012-03-08T11:40:23.403-05:002012-03-08T11:40:23.403-05:00Major_Freedom: You seriously need to improve your ...<b>Major_Freedom</b>: <i>You seriously need to improve your memory. </i><br /><br /><b>Major_Freedom</b>: <i>A much better metric is to compare the price of oil to the price of gold. </i><br /><br />Which we did above. <br /><br />Century<br />http://tinyurl.com/gold2oil<br /><br />Post-WWII<br />http://fintrend.com/wp-content/uploads/2011/09/Oil-vs-Gold.jpg<br /><br /><b>Major_Freedom</b>: <i>Since 2009, the price of gasoline in terms of gold has remained flat. that means that the recent run up in gasoline prices is due primarily to inflation of the money supply. </i><br /><br />Notably, you ignored the wild fluctuations in 2008. But yes, inflationary pressure is part of the picture, not just monetary expansion, but a hedge against future monetary expansion. <br /><br /><b>Major_Freedom</b>: <i>I shouldn't have to do that once I have already established my definition. </i><br /><br />The proper use of the term was established in the original post which concern the proper measure of price inflation.Zachrielhttps://www.blogger.com/profile/11268229653808829377noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-46938731436993307162012-03-08T01:48:44.547-05:002012-03-08T01:48:44.547-05:00Zachriel:
"Major_Freedom: Prove it."
W...Zachriel:<br /><br /><i>"Major_Freedom: Prove it."</i><br /><br /><i>We covered this above, but will do so again. The simplest way is to simply adjust the data for inflation. <br />http://inflationdata.com/inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart_sm.jpg</i><br /><br />That is a flawed method. The way the "real" price is calculated is by indexing the price by an inflation deflator, the CPI. But inflation of the money supply doesn't affect all prices equally. It affects some goods differently than others. <br /><br />Inflation of the money supply can lead to the price of oil and gasoline rising by 20% all because of inflation of the money supply, and yet consumer prices in general in thee CPI rose by something like 2% or whatever.<br /><br />By deflating the nominal price of oil by a consumer price index, it will severely under-report the extent to which inflation of the money supply is the cause.<br /><br />A much better metric is to compare the price of oil to the price of gold. In this way, because gold is a good measure of inflation of the money supply, then we can infer that if the rise in the price of oil is due primarily to non-inflationary factors, then it should rise relative to gold. If on the other hand oil isn't rising in price relative to gold, then we can infer that the rise in price is primarily inflation driven.<br /><br />So what do we see?<br /><br />http://www.businessinsider.com/everything-priced-in-gold-2012-3#us-first-class-postage-has-been-getting-cheaper-in-the-last-decade-in-terms-of-gold-despite-rising-stamp-prices-1<br /><br />Second chart.<br /><br />Since 2009, the price of gasoline in terms of gold has remained flat. that means that the recent run up in gasoline prices is due primarily to inflation of the money supply.<br /><br /><i>"Major_Freedom: You even asked me before about it, and I told you."</i><br /><br /><i>As your use of the term is non-standard, you might just spell out monetary inflation so your meaning is clear.</i><br /><br />I shouldn't have to do that once I have already established my definition. I don't expect you to keep putting "price" in front of "inflation" every time you use the word "inflation", because unlike you, my brain is not so defective that my memory lasts only a short while. <br /><br />You seriously need to improve your memory. It's total shit.<br /><br />So no, I'm not going to keep saying what you want me to say. It's your responsibility to remember.Major_Freedomnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-2415790649893093152012-03-06T20:51:01.886-05:002012-03-06T20:51:01.886-05:00ekeyra: "You asked for a prognostication on ...<b>ekeyra:</b> <i> "You asked for a prognostication on a date and time of an event. Thats not asking for analysis or critical thinking. Thats asking for a tarot card reading or the point spread of the superbowl. "</i><br /><br />Sorry, I didn't make myself clearer. I was thinking of something like: "The tripling of base money from 2009-2001, will lead to Zimbabwe like hyper-inflation withing the next 2 or 3 years". Or if you don't want to stick your next out too far, "I expect inflation to be greater than 15% with a year or two, unless there is some major change in Government policy".<br /><br />The idea is this: given the tripling of base money is there anything thing that could happen in the future that would make you doubt your theory? <br /><br />If you can't make any predictions at all, if everything that hhappens can, after the fact, be fitted into your theory, then I woudl say the theory is no better than a theory which says "Whatever happens, happens", or "The economy is basically a random number generator".macromanhttps://www.blogger.com/profile/04142304372187307154noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-54132600423067086572012-03-06T20:24:36.444-05:002012-03-06T20:24:36.444-05:00Zachriel: Inflation effects on petrol prices have ...<b>Zachriel</b>: <i>Inflation effects on petrol prices have been overwhelmed over the short term by other factors, including threats to the supply line. </i><br /><br /><b>Major_Freedom</b>: <i>Prove it. </i><br /><br />We covered this above, but will do so again. The simplest way is to simply adjust the data for inflation. <br />http://inflationdata.com/inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart_sm.jpg<br /><br /><b>Major_Freedom</b>: <i>You even asked me before about it, and I told you. </i><br /><br />As your use of the term is non-standard, you might just spell out monetary inflation so your meaning is clear.Zachrielhttps://www.blogger.com/profile/11268229653808829377noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-5518248999146852692012-03-06T13:14:02.500-05:002012-03-06T13:14:02.500-05:00Zachriel:
"Major_Freedom: "Sure there&#...Zachriel:<br /><br /><i>"Major_Freedom: "Sure there's inflation involved" is a non-committed, window dressing caveat used solely for the purposes of trying to mask your ideology."</i><br /><br /><i>Not an argument.</i><br /><br />I agree, what you said is not an argument. It's a non-committed, window dressing caveat used solely to mask your ideology.<br /><br /><i>Inflation effects on petrol prices have been overwhelmed over the short term by other factors, including threats to the supply line.</i><br /><br />Prove it.<br /><br /><i>Before that, the inflation signal was overwhelmed by financial shocks.</i><br /><br />Prove it.<br /><br /><i>"Major_Freedom: Thus, calling for inflation as an alleged cure to solve private debt problems, is self-defeating, as a portion of the money leaves the banking system into the private sector as debt."</i><br /><br /><i>"Major_Freedom: Inflation is still taking place even if prices go from 100 one period to 100 the next period."</i><br /><br /><i>As usual, by changing the common meanings of terms, you make any point you are trying to make opaque to understanding.</i><br /><br />I haven't changed anything. Your memory is just really that bad. I have always used the definition of inflation as being an increase in the quantity of money and volume of spending. I have not once wavered from it. You even asked me before about it, and I told you. Don't blame me that your memory is so terrible.<br /><br /><i>Price inflation, what most everyone calls "inflation", is defined by changes in price.</i><br /><br />We've been over this. I know how you define it, and I use the original definition.<br /><br />Since definitions are not objective claims, but verbal stipulations, I am not committed to using your definition. As long as I stick with the same definition, which I have been doing all along, then you cannot accuse me of changing definitions.Major_Freedomnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-36081278218074822252012-03-05T19:29:41.674-05:002012-03-05T19:29:41.674-05:00Mike M: I said look at a 100 year chart you chose ...<b>Mike M</b>: <i>I said look at a 100 year chart you chose something different. </i><br /><br />Mike, Mike, Mike. <br /><br /><b>Mike M</b>: <i>Go do some homework on the price of oil priced in terms of gold over the past 40 + years. No material change present. </i><br /><br />So we looked. And we showed that you misstated the range, and more important, the significance of that range. <br /><br /><b>Mike M</b>: <i>I said look at a 100 year chart you chose something different. </i><br /><br />So, let's look at the hundred year chart. <br />http://tinyurl.com/gold2oil<br /><br />As we stated, it varies from high to low by a factor of more than six. There were wide variations in the ratio of gold-to-oil over most of the period.Zachrielhttps://www.blogger.com/profile/11268229653808829377noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-11046009439392136802012-03-05T18:20:36.184-05:002012-03-05T18:20:36.184-05:00Macro,
You asked for a prognostication on a date ...Macro,<br /><br />You asked for a prognostication on a date and time of an event. Thats not asking for analysis or critical thinking. Thats asking for a tarot card reading or the point spread of the superbowl. <br /><br />Von mises and hayeks theories are based entirely on the foundations of what information is NEVER AVAILABLE TO ANYONE, presumably a date and time for a specific event thats demands the calculation of 6 billion actors would fall into that category. <br /><br />Unless human actions is simply mechanical and can be mathematically calculated, your objections are absurd.ekeyrahttps://www.blogger.com/profile/17413110869433997820noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-85810384773391178422012-03-05T17:27:58.756-05:002012-03-05T17:27:58.756-05:00LK said "this isn't 1971".
Wow ver...LK said "this isn't 1971". <br /><br />Wow very insightful but you're right. It's worse<br /><br />Your playing games. Of course it inflates the money supply. It's a question of when and where. Unless you believe the Fed will soak up the excess and thereby run interest rates up Iin a draconian fashion.<br /><br />The again this isn't the Volker era is it? That option is off the table. Welcome to the new works where we paper over everything and expect no negative effects.Mike Mnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-9964998350843644812012-03-05T17:21:30.863-05:002012-03-05T17:21:30.863-05:00Zachriel
No that means I'm not here to spoon ...Zachriel<br /><br />No that means I'm not here to spoon feed you.<br /><br />I said look at a 100 year chart you chose something different. Charts have to be read with interpretation of what is behind spikes both high and low. Failure to do so offers nothing meaningful.Mike Mnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-28531670055585703962012-03-05T16:55:03.262-05:002012-03-05T16:55:03.262-05:00ekeyra:
"2) can you make a definite predicti...<b>ekeyra:</b><br /><br /><i>"2) can you make a definite prediction, before the event, about when the US will be like zimbabwe ?"<br /><br />Would you like the powerball numbers too?</i><br /><br />So, according to Austrian economics, the economy is completely random, like powerball? Makes me wonder why von Mises and Hayek wasted their time working out a theory about the economy based on purposeful human action.macromanhttps://www.blogger.com/profile/04142304372187307154noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-57430785849988045522012-03-05T07:38:34.349-05:002012-03-05T07:38:34.349-05:00"On another post, LK recently noted that the ...<i>"On another post, LK recently noted that the dollar is the "world's reserve currency," implying that we could print more dollars and get away with it. I remember what happened in 1971 when the government tried to manipulate things and the whole scheme blew up in our faces."</i><br /><br />This isn't 1971, the US is not on a Bretton Woods international gold standard, and you haven't answered my question:<br /><br />If the government engages in a deficit financed stimulus, covering deficits $for$ with bond issues, how does that inflate the money supply?Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-40938104863743531472012-03-04T20:47:56.570-05:002012-03-04T20:47:56.570-05:00Mike M: I’m not interested in littering this site ...<b>Mike M</b>: <i>I’m not interested in littering this site with endless citations in lieu of arguments. </i><br /><br />In other words, you can't be bothered to support your claims. <br /><br /><b>Mike M</b>: <i>Respects the gold oil ratio has generally run in band of .05 to .10 since 1900 with periods of short term volatility for various reasons and is presently at .06. </i><br /><br />0.05 to .10 is a factor of two, hardly stable. Even then, you're off. Over the last 40 years, which was the period you originally stated, the ratio has varied by a factor of three. Over the last 100 years, the factor between high an low is over six. <br /><br />http://media.resourceinvestor.com/resourceinvestor/historical/News/2011/2/PublishingImages/20110224-Gold-Oil.jpg<br /><br />There are obviously very large "material changes present".Zachrielhttps://www.blogger.com/profile/11268229653808829377noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-44912830394556699202012-03-04T18:21:33.142-05:002012-03-04T18:21:33.142-05:00Anderson: The Austrians would note that "nega...<b>Anderson</b>: <i>The Austrians would note that "negative interest rates" are not the product of a real market, but rather are rates manipulated by the Fed.</i><br /><br />Does that explain why no private entity is offering a higher rate of return, to attract some capital to invest profitably? Can the fed's relatively small holdings of US Treasury debt explain the negative rates. <br /><br />And more important than explanations after the fact; did any Austrian say this was possible before the fact? My guess is that Austrians would have said something like: the Fed can manipulate interest rates in the short-term, but interest rate is about future good/present good exchange and the market will establish what the real rates are. <br /><br />However, if an Austrian did predict the current situation before the event I would like to consider it.macromanhttps://www.blogger.com/profile/04142304372187307154noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-75735373300142173062012-03-04T18:12:09.447-05:002012-03-04T18:12:09.447-05:00Mike M says: I’m not interested in littering this ...<b>Mike M</b> says: <i>I’m not interested in littering this site with endless citations in lieu of arguments.</i><br /><br />"My logic is perfect, so don't show me facts". Sounds like a perfect description of Austrian economics.macromanhttps://www.blogger.com/profile/04142304372187307154noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-44011641679971208002012-03-04T17:40:09.445-05:002012-03-04T17:40:09.445-05:00"2) can you make a definite prediction, befor..."2) can you make a definite prediction, before the event, about when the US will be like zimbabwe ?"<br /><br />Would you like the powerball numbers too?ekeyrahttps://www.blogger.com/profile/17413110869433997820noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-7033363621553411022012-03-04T16:39:07.735-05:002012-03-04T16:39:07.735-05:00The Austrians would note that "negative inter...The Austrians would note that "negative interest rates" are not the product of a real market, but rather are rates manipulated by the Fed.<br /><br />On another post, LK recently noted that the dollar is the "world's reserve currency," implying that we could print more dollars and get away with it. I remember what happened in 1971 when the government tried to manipulate things and the whole scheme blew up in our faces. <br /><br />The notion that we can continue to inflate the dollar without any negative ramifications demonstrates just how intellectually and morally bankrupt Keynesianism really is.William L. Andersonhttps://www.blogger.com/profile/01802990642236807359noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-14947405715341106652012-03-04T15:21:21.718-05:002012-03-04T15:21:21.718-05:00Zachriel : “It's usual when purporting to mak...Zachriel : “It's usual when purporting to make an argument to present the information required …”<br /><br />Go Google Oil priced in gold terms and you can have all the resources you want. It’s not like its hidden. I’m not interested in littering this site with endless citations in lieu of arguments. LK occupies that role.<br /><br />Zachriel: “If you were buying oil in Euros …”<br />Euros, Pounds, Dollars are all corrupt, flawed, floating abstracts. Comparing them to oil at any given point in time is a circular exercise.<br /><br />Respects the gold oil ratio has generally run in band of .05 to .10 since 1900 with periods of short term volatility for various reasons and is presently at .06. If you want to measure consistently of value and relationships do it over a long period of time.Mike Mnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-21960453287893804252012-03-04T09:49:27.590-05:002012-03-04T09:49:27.590-05:00Mike M: First: Go do some homework
It's usua...<b>Mike M</b>: <i>First: Go do some homework </i><br /><br />It's usual when purporting to make an argument to present the information required to support the argument, rather than wave your hands and say go read a book or something. Not only is it a help to our readers, but it lends discipline to your own statements when you support them before uttering them. <br /><br /><b>Zachriel</b>: <i>Inflation effects on petrol prices have been overwhelmed over the short term by other factors, including threats to the supply line. Before that, the inflation signal was overwhelmed by financial shocks</i><br /><br /><b>Mike M</b>: <i>the price of oil priced in terms of gold over the past 40 + years. </i><br /><br />First, try to jive your statement about the trend over 40+ years with our statement, which concerned short term trends. <br /><br />Here's inflation adjusted oil prices in dollars. Notice the short term volatility, and the huge fluctuation during financial crisis. <br />http://inflationdata.com/inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart_sm.jpg<br /><br />If you were buying oil in Euros, the exchange rate for dollars varied from a high of $1.59 to a low of $1.20 over the last five years, currently $1.34; for British pounds, from $2.10 to $1.39, currently $1.59; not nearly enough to explain the fluctuations during the financial meltdown. Indeed, the dollar is stronger today against the Euro and the Pound than it was just before the financial crisis. <br />http://www.oanda.com/currency/historical-rates/<br /><br />If you look over the last decade or so, the dollar has been relatively stable against the Euro, but was much stronger at the end of the Clinton Administration, when the U.S. was running cash surpluses. <br />http://2.bp.blogspot.com/-Qxj8GqXEvdc/TtLri5Of0mI/AAAAAAAAGAg/4O5NdLYaxi8/s1600/Euro.jpg <br /><br /><b>Mike M</b>: <i>Go do some homework on the price of oil priced in terms of gold over the past 40 + years. No material change present. </i><br /><br />Now, to address your comment, the gold-oil ratio has fluctuated widely (by a factor of 3) over the last 40 years. There are very large "material changes present". There are obviously other factors than the relationship of price to gold.Zachrielhttps://www.blogger.com/profile/11268229653808829377noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-29944284123662996382012-03-04T07:10:36.249-05:002012-03-04T07:10:36.249-05:00"If we remove the extraneous motion from this...<i>"If we remove the extraneous motion from this strange act, we find that the Federal Reserve is effectively buying government debt at auction. This is exactly, precisely what Zimbabwe did, but with one more step involved,"</i><br /><br />No, it isn't<br /><br />Zimbabwe did large-scale, direct monetization of budget deficits, with severe destruction of capacity to produce output, at one point (2008) with a fiscal deficit at 82 percent of GDP.<br /><br />The US budget deficit as a % of GDP is nowhere near that (fluctuating around 10%), and there are significant idle resources, unused capacity and unemployment, nothing like the third world basket case Zimbabwe.<br /><br />The US dollar is also the world's reserve currency, which gives it massive capacity to import factor inputs and other commodities, from capital goods to consumer goods.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-23075698567167956262012-03-03T19:37:09.344-05:002012-03-03T19:37:09.344-05:00Ekeyra
Two questions about your shell game.
1) w...Ekeyra<br /><br />Two questions about your shell game.<br /><br />1) why doesn,t this just show that foreign central banks think us treasuries are safe than freddie and Fannie debt?<br /><br />2) can you make a definite prediction, before the event, about when the US will be like zimbabwe ? As LK noted, monetary base has tripled since the trough of the recession while inflation is still low by historical standards? Wouldn't,t that contradict Austrian predictions? I certainly thought it did contradict monetarist and austrian predictions and it has had a big influence on changing my thinking. If the US has Zimbabwe like inflation within say two more years I will probably change my thinking again. So what time limit would you set bothe this hyperinflation?macromanhttps://www.blogger.com/profile/04142304372187307154noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-33764503266100341552012-03-03T15:28:42.835-05:002012-03-03T15:28:42.835-05:00"Have you ever seen a sidewalk magician run t..."Have you ever seen a sidewalk magician run the shell game, where a pea under a shell is magically shuffled around - now you see it under this shell, now you see it under that shell, now it disappears completely - or does it? The more it moves around, the more confused you get. If you can only figure out which shell the pea is hidden under, you win! But where is the pea? The point of the game, from the perspective of the street hustler, is to use complexity of motion to confuse the mark.<br /><br />These are the three critical points to remember as you read further:<br /><br />1 The US government has record amounts of Treasuries to sell.<br /><br />2 Foreign central banks, which have a big pile of agency bonds in their custody account, would like to help but want to keep things somewhat under the radar to avoid scaring the debt markets.<br /><br />3 The Federal Reserve does not want to be seen directly buying US government debt at auctions (and in fact is not permitted to, but many rules have been 'bent' worse during this crisis), because that could upset the whole illusion that there is unlimited demand for US government paper, but it also desperately wants to avoid a failed auction.<br /><br />For various reasons, the Federal Reserve cannot just up and start buying all the Treasury paper that becomes available in record amounts, week after week, month after month. <br /><br />Instead, it uses this three-step shell game to hide what it is doing under a layer of complexity:<br /><br />Shell #1: Foreign central banks sell agency debt out of the custody account.<br /><br />Shell #2: The Federal Reserve buys those agency bonds with money created out of thin air.<br /><br />Shell #3: Foreign central banks use that very same money to buy Treasuries at the next government auction.<br /><br />Shuffle, shuffle, shuffle, shuffle, shuffle, SHUFFLE, shuffle! Confused yet?<br /><br />Don't be. If we remove the extraneous motion from this strange act, we find that the Federal Reserve is effectively buying government debt at auction. This is exactly, precisely what Zimbabwe did, but with one more step involved, introducing just enough complexity to keep the entire game mostly, but not completely, hidden from sight. They can scramble the shells all they want, but the pea is still there somewhere - the pea being the fact that the Fed is creating money to fund the purchase of US debt."<br /><br />http://www.chrismartenson.com/blog/shell-game-how-federal-reserve-monetizing-debt/25806ekeyrahttps://www.blogger.com/profile/17413110869433997820noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-9788213828347795652012-03-03T12:11:25.830-05:002012-03-03T12:11:25.830-05:00Zachriel said: “Not an argument. Inflation effec...Zachriel said: “Not an argument. Inflation effects on petrol prices have been overwhelmed over the short term by other factors, including threats to the supply line. Before that, the inflation signal was overwhelmed by financial shocks”<br /><br />First: Go do some homework on the price of oil priced in terms of gold over the past 40 + years. No material change present.<br /> <br />Second: All of your analysis is flawed because your premise if flawed. You assume the USD is the static benchmark to analyze the world around it.Mike Mnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-44219470534957963032012-03-03T03:28:12.500-05:002012-03-03T03:28:12.500-05:00"The only thing keynesians have is inflation&..."The only thing keynesians have is inflation" Anderson.<br /><br />Whether Anderson means price inflation or money supply inflation, or thinks they are the same thing this look wrong. In depressions keynesians seem to rely more on government spending of money borrowed from scared savers clamouring for a safe haven. So bearish are the public that now the interest rate on US debt after allowing for price inflation, is negative. Keynes had some sort of explanation for this odd circumstance, but how does an Austrian economist account for negative real interest rates, given that the fed holds less than 10% of US treasury debt, Last time I looked??macromanhttps://www.blogger.com/profile/04142304372187307154noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-74490059914494159302012-03-02T20:58:07.038-05:002012-03-02T20:58:07.038-05:00Major_Freedom: "Sure there's inflation in...<b>Major_Freedom</b>: <i>"Sure there's inflation involved" is a non-committed, window dressing caveat used solely for the purposes of trying to mask your ideology. </i><br /><br />Not an argument. Inflation effects on petrol prices have been overwhelmed over the short term by other factors, including threats to the supply line. Before that, the inflation signal was overwhelmed by financial shocks. <br /><br /><b>Major_Freedom</b>: <i>Thus, calling for inflation as an alleged cure to solve private debt problems, is self-defeating, as a portion of the money leaves the banking system into the private sector as debt. </i><br /><br /><b>Major_Freedom</b>: <i>Inflation is still taking place even if prices go from 100 one period to 100 the next period.</i><br /><br />As usual, by changing the common meanings of terms, you make any point you are trying to make opaque to understanding. Price inflation, what most everyone calls "inflation", is defined by changes in price.Zachrielhttps://www.blogger.com/profile/11268229653808829377noreply@blogger.com