false inflation myths that are false

Money needs to move i.e. circulation for inflation to occur. The faster it moves i.e. the velocity, the more price inflation. If you just print a load of money and it sits in the corner i.e zero speed of circulation, there is no price inflation.
 
billyjoerob, isn't your entire post predicated on believing the official CPI numbers represent reality? If so, that's horseshit.
 
Interesting post. The one thing I take issue with is using one of the most well managed empires in history as the example. Sober men with common interests and strong family and social ties are not what our leaders are made of. Our guys do not say no very often. Ruling is more about saying no than yes.

The British consol hovered around 2-4% from the death of Napoleon to WWI
 
Quote from billyjoerob:

There are some things that everybody seems to think are so that just bother me, such as:

Myths:
a) inflation is inevitable. False. Weimar and the 1970s were a vast exception. You only go off the gold standard once. The British consol hovered around 2-4% from the death of Napoleon to WWI. Low interest rates and inflation are the norm. Would not be a surprise if inflation did not return during our lifetimes.

http://www.newworldeconomics.com/archives/2011/041711_files/consols.jpg

b) gold goes up with inflation. Again, there is no evidence for this. Gold has been up for 11 straight years, not a trace of inflation. That's data. Myth, busted.

c) inflation is caused by the printing of money aka inflation is everywhere and always a monetary phenomenon. Hmmm, Japanese have been printing money forever. True it's mostly sterilized, but they've still spent a ton of money and lowered rates to virtually zero. Lot of good it's done them. If inflation were a monetary phenomenon, Japan and the Bernank would have solved the deflation a long time ago. They haven't, needless to say. Look at what's right in front of your own face. Don't listen to the old myths.

Truth:

Deflation/inflation is a demographic and real phenomenon, not a monetary phenomenon. Inflation is caused by too many young people forming households, not saving, and chasing too few goods. That was the 1970s in the US and the 1960s in Japan. Old people don't cause inflation because the aged and infirm never spend money. Again, see Japan. See the US. See the global deflation all around us as the world greys.

This paper shows that in Japan and the US, "inflation is firstly a demographic phenomneon." p 13 has the goods.

http://www.insead.edu/facultyresearch/research/doc.cfm?did=47411

Remember that ontology always precedes logic, no matter what the idealists would have you believe.
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Young man, eleven years is but the twinkling of an eye.
 
The focus on "inflation" i.e. CPI, core CPI in fact is the mistake.
Inflation IS the increase of the money in circulation , it causes asset inflation (such as house price inflation) which we are having now, just like in 2004-2007.
It causes commodity prices to go up therefore causing food price hikes, that's inflation even if the Fed disregard it. The mainstream economists' concept of inflation is a sham, asset inflation is just as bad as their "inflation" because it causes booms and busts.
Bernanke or rather Yellen are about to see the thing blow up in their face, just watch.
 
Quote from trade2live:

The focus on "inflation" i.e. CPI, core CPI in fact is the mistake.
Inflation IS the increase of the money in circulation , it causes asset inflation (such as house price inflation) which we are having now, just like in 2004-2007.
It causes commodity prices to go up therefore causing food price hikes, that's inflation even if the Fed disregard it. The mainstream economists' concept of inflation is a sham, asset inflation is just as bad as their "inflation" because it causes booms and busts.
Bernanke or rather Yellen are about to see the thing blow up in their face, just watch.
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" blow up in their face,"

your remark is not even close to reality.
bernanke, yellen and their friends will know how to hedge themselves.not only will they hedge themselves but they will make large fortunes out of their derelict actions. it is the middle class who will suffer the consequences of their dangerous actions.
 
Surely they are but as governments are defaulting, pensions and things of that nature are going to be eliminated. There's also the issue of unions.

We aren't seeing the inflation rise yet most likely because of deflationary pressures. Cars, consumer goods, etc. are all being replaced less and less frequently. Same goes for things like computers and even high-end grocery items.

We'll probably see it creep in more soon due to the fact that less trading is being done in US dollars for things like commodities and what not. Our markets aren't as liquid nor are they as honest as they used to be. That eventually will play a factor in our monetary policy.


Quote from zdreg:

in the mean time corporate america is grateful, as are shareholders.
. <http://www.bloomberg.com/news/2013-...on-as-apple-to-verizon-borrow.html?cmpid=yhoo>


is the party over?
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The OP needs to learn about money to have an understanding of inflation. Lots of kool-aid drinking 'traders' out here. Inflation is by definition the increase in money and credit. Inflation is definitely a monetary phenomenon. What else can it be? Go ask the people in Zimbabwe.

Inflation needs time to play itself out. U.S. will eventually get inflation. We currently are not experiencing high inflation because certain forces are keeping it at bay. If you shop around, consumer staples are steadily going up.
 
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