Inflation

The Surprising Disappearance of Inflation

Venezuela stands tall as a socialist outlier.

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bolivars

In a world in which the Cold War is a fading memory, North Korea and Cuba endure as museums of communism, so no one will forget how criminally insane it always was. In a world haunted by the specter of persistently falling prices, some countries are creating severe inflation, so we can be grateful for its virtual disappearance. 

One of the governments providing this public service is that of Venezuela, where the currency has lost so much value that even robbers reject it. A recent carjacking victim told The New York Times his armed captors had no interest in his bolivars. They only wanted to know whether he had U.S. dollars stashed somewhere. 

That sort of thing happens when annual inflation is over 150 percent. Feeding a family of five for a month cost three times more in August than it did a year before. Shortages abound; black markets are proliferating; and Venezuelans find themselves bartering goods and services to get by. 

The source of the malady is plain: a socialist government that has mismanaged the economy, which is also feeling the pain of falling world prices for oil, the nation's chief export. "There's been a lack of respect and understanding of the implication of money printing and excessive money creation on the economy," former International Monetary Fund official Claudio Loser told The Wall Street Journal

The more currency that is produced the less anyone wants it. "People are literally getting rid of money faster than the government can print it," Bank of America economist Francisco Rodriguez said. 

Venezuelans find that their misery has only a little company. The yearly rate in Argentina has run above 20 percent for years and is now around 30 percent. Malawi is at 24 percent. Each day, the coins and bills their citizens carry buy less than the day before. 

This may be hard for Americans to imagine, given their recent experience. On average, over the past five years, the consumer price index has risen at the minimal rate of 2 percent annually, and the inflation rate hasn't reached 4 percent since 1991. Many adults have never had the dread experience of watching prices rising rapidly across the board year after year. 

Their elders, who were not so lucky, retain a fear of inflation in their bone marrow. Baby boomers were raised on lurid tales of hyperinflation in 1920s Germany, when consumers had to carry piles of money in wheelbarrows to do their normal shopping. That wasn't the worst of it. The trauma, we were taught, led to the rise of Adolf Hitler. 

In the 1970s, we got our own taste of it. The U.S. inflation rate soared into double digits and stayed there. A bag of groceries that cost $20 in 1972 cost $46 in 1982. The price of gold skyrocketed from $38 per ounce to $615. Not much imagination was needed to picture a sudden run on wheelbarrows. 

It didn't happen, thanks to a Federal Reserve that, in the early 1980s, slammed on the brakes by raising interest rates and curbing monetary growth. Since then, inflation has stayed tame—to the point that these days, the debate is about whether we have enough of it. Charles Evans, president of the Federal Reserve Bank of Chicago, recently argued that the central bank shouldn't raise interest rates until "we begin to see some sustained upward movement in core inflation." 

That view is at odds with the demands of those Republicans who have been predicting a nasty outbreak of inflation since at least 2009. Conservatives once had to battle to get liberals to recognize the harm done by creating too much money. But rather than celebrate their victory, they keep fighting the last war. As a result, they ignore the new danger, which takes the form of deflation and slow growth. 

In September, the Bureau of Labor Statistics reported that U.S. inflation over the previous year was zero. The European Union's inflation was less than zero. Japan is in the same territory. Falling commodity prices are a threat to developing countries whose economies depend on exporting raw materials. A little inflation might be a good thing for growth. 

No one would have imagined a couple of decades ago that we would learn how to stop high inflation and keep it stopped. Like communism, it can still be found in a few places. But like communism, it's no longer much of a threat.

© Copyright 2015 by Creators Syndicate Inc.

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  1. I tend to think the apparent deflation trends are related to the fact of stagnant wages, etc. Also factor in that gas isn’t ~$4/gal anymore.

    Though food prices have continued to inflate: https://research.stlouisfed.org/fred2/graph/?g=8l2

    1. So have house prices, stock/asset prices, college education prices, health care prices, and government prices. Everything propped up by debt has continued its march upward and the reversal of that is the deflation that banks/govts fear.

      Right now inflation is benefiting homeowners (generally older/richer) at the direct expense of renters (younger/poorer). Existing wealthy at the expense of entrepreneurial/poor. Tenured professors and administrators at the expense of students. Old/sick at the expense of young/healthy. And bureaucrats/DC at the expense of everyone else.

      but hey that’s not really inflation because all those prices going up is a sign of civilization advancing or something

  2. “No one would have imagined a couple of decades ago that we would learn how to stop high inflation and keep it stopped. Like communism, it can still be found in a few places. But like communism, it’s no longer much of a threat.”

    I remember hearing how we had defeated the boom-bust business cycle with the rise of the tech economy around 1999…

    I remember hearing how housing prices “could only go up” around 2007…

    Man, memories are short.

    “As it will be in the future, it was at the birth of Man
    There are only four things certain since Social Progress began.
    That the Dog returns to his Vomit and the Sow returns to her Mire,
    And the burnt Fool’s bandaged finger goes wabbling back to the Fire;

    And that after this is accomplished, and the brave new world begins
    When all men are paid for existing and no man must pay for his sins,
    As surely as Water will wet us, as surely as Fire will burn,
    The Gods of the Copybook Headings with terror and slaughter return!”

    1. +1 Kipling

    2. Many here will recognise this as Kipling because of references to “the Gods of the Copybook Headings” in many conservative writing. And the novel Brave New World also see’s the genesis of it’s title here. But in regard to the article on inflation, we have the Fed slowly, ever so slowly unwinding QE, having stopped purchases, and now contemplating moving off of a Zero Base Interest Rate. I’ve read, and it makes sense to me that low inflation is due to the fact that most newly generated money has stayed electronic and staying in “zero velocity” status in reserve bank accounts or in the form of purchased Treasury notes earning electronic money that goes in another account.

      Until the e-money is used in a way economists could measure in velocity-spending in the economy-it can’t raise interest. Some of it does, but clearly not beyond the worldwide demand rate for US Currency. This is huge, and a little remarked side-issue to our status as “reserve currency.” So generating money that doesn’t almost immediately result in an increase in velocity has made the difference in this new era of expanding the boundaries and pushing the envelope in how we can play with fiat currency.

  3. But I told the Peanuts this years ago!

  4. The price of gold skyrocketed from $38 per ounce to $615.

    Was that from inflation or from the decoupling of the dollar to gold?

    1. The Arabs were drowning in cash…oil money. They had warehouses full of it. When they realized it was losing value to the tune of millions per hour they converted it to gold. They bought up the gold supply and the price skyrocketed.

  5. I am suspicious that the indicators used to measure inflation are not reliable. Prices of many key food and fuel items have soared over the past several years during this time of “no inflation.”

    Are those localized price increase due to non-inflationary factors, or is the rate of inflation being deliberately downplayed?

    1. The US govt’s standard metric for inflation is the CPI (consumer price index). There’s long been a great deal of criticism over its validity.

    2. Unemployment is 5.1%.

      Yep.

      Summer of recovery. The economy is booming. Bush. Three-3 chess.

    3. It has long seemed to that the CPI is weighted in favor of stuff that does tend to cost the same or less year-on-year like computers and big-screen TVs, and gives less importance to things like food and home energy costs, which tend to rise on a regular basis. The difference is that most people buy food and use electricity on a very frequent basis, while only a few tech-nerd outliers will replace their computer or TVs more often than once every few years.

  6. As a result, they ignore the new danger, which takes the form of deflation and slow growth.

    Ok. I might finally have to buy into the “Chapman is a moron” theory.

    1. Or perhaps Chapman is the Plug. But then I repeat myself.

    2. Are you saying that deflation is not a problem in general, or that deflation is not a danger right now?

      1. He’s saying Chapman is a moron.

        But why don’t you tell us your answers to your questions?

        1. I think deflation in general is a problem, but not really a danger right now. Deflation may be nice for consumers with a steady income, but it’s bad for producers and investors, which makes it bad for employment down the line, especially if deflation is happening across the board.

          I don’t think there is a significant risk of widespread deflation right now, though.

          1. Right now, as low as the rate of inflation (i.e., currency depreciation) is, it’s a folly to save money at a bank. Interest rates are a fraction of inflation rates, so your balance, even with compound interest deposited back in the account, will lose purchasing power as time goes on.
            Inflation is bad for anyone who saves, or who has a pension, or who holds an annuity. It’s bad for lenders, but good for those with mortgages and other loans, and for debtors in general. Deflation is just the reverse.
            I hear people talk about modest inflation (one or two percent) as being ideal. I don’t understand why that is. Could someone explain it?
            Although inflation will generally cause rising prices, rising prices are not always due to inflation.
            I’ve got a few old (pre-1923) German banknotes. They’re scary. A 100,000,000 mark note was worth so little that it is only printed on one side.

          2. Whether deflation is bad or good depends on why it exists.

          3. Is there an economy that imploded due to run away deflation? I mean we do actually have several examples of that happening because of hyperinflation.

            This seems like that always repeating argument with Leftists that yeah, central planning has destroyed societies and economies before, but maybe a free market would result in feudalism if we try it, even though it never has. So we should do central planning.

      2. Why is deflation a problem? Everybody I know likes lower prices when they go to the store.

        And, when prices at the store are lower, they tend to buy more because they have more money left over after they have purchased what they need. So, why is inflation good for growth?

        Arguably, heightened fear of future inflation, which is different from inflation itself, could spur some immediate spending as consumers fear that their medium of exchange is losing value. However, after they have spent that money on some consumer good, the money is gone and the prospect of future spending, which would spur future growth, is foreclosed upon. Only a Keynesian argues that savings is bad. Time preference … how does it work?

        1. Imagine that you own a business like a cabinet and counter-top fabricating shop. You buy granite, oak, fiberboard and hinges to stock your shop every quarter. Now deflation sets in, so by the time you buy the raw materials, make the cabinets and sell them, prices have fallen so that you may not make a profit. Maybe the cost of materials three months ago is even more than you can charge for cabinets today, so you may have to sell them at a loss just to have money to make payroll. Your customers know that prices are falling, so they delay buying cabinets for a month or two, further eroding your profits. So, you cut production, lay some people off and put some of your capital into the stock market where you think you can get enough of a return to keep the doors open at your shop. But producers everywhere are doing the same thing, so returns in the stock market shrink and you close the business. Hopefully your house isn’t mortgaged.

          1. Unless you’re mass producing cabinets and countertops (in which case you have a better chance of making your profit through shear quantity) you’re probably not offloading a cabinet that the customer hasn’t already at least put a deposit on.

            Deflation isn’t inherently bad for producers, as long as you plan ahead as much as you’re able to.

            1. Why would you produce anything if prices for inputs, raw materials, are high now, and prices for finished products are lower in the future? Wouldn’t you postpone buying inputs and maybe cut production in the meantime? Or maybe you would put your money elsewhere?

              I don’t understand why people think deflation is a good thing other than a gut-level response that cheaper stuff is better.

              1. I’m also not on board with the assumption that deflation is bad. In the case of particular producers, like inflation, it would have to be very rapid to result in much difference in prices on either end of production. Probably very rapid deflation has problems like very rapid inflation. But deflation of a steadier, more modest sort, seems to benefit the consumer, which Bastiat recommends as the way to answer all economic questions.

              2. The problem is the world you describe is nearly impossible to trigger.

                Lets say in the proposed example that the cabinet maker has on average ~ a 3 month lead time from raw material purchase to sale and installation of the final product and a net profit margin of on average 9%.

                Now, deflation sets in “general” prices start to fall but this cabinet maker has not yet had to adjust his prices, what level of deflation would be required to force him to lower his price to the point where he makes no profit at all?

                3% per month or 36% per year

                If inflation were running at 36% per year it would be equally as much of a disaster.

                Deflation is only problematic for very long lead time production items and for those who are heavily in debt

          2. In other circles we call deflation ‘productivity.’ I grow more corn which in most circumstances results in a lower unit price for corn but not so low as to overcome the value of the increase in units. The entire tech industry is a huge deflation engine. What did a computer cost 50 years ago? What does it cost now?

            Deflation hurts debtors primarily, and just who is the world’s greatest debtor? Those who hold assets still generally do fine because even though their assets command fewer dollars, so do the other assets and services they desire. Exceptions abound but the deflation boogeyman has been a successful myth for too long.

            1. Deflation and productivity are not the same thing. You may be very efficient at producing corn, but if you expect prices will be lower for corn in the fall, you will plant fewer aces of corn in the spring–especially the acres that are harder to cultivate. If the decease in production doesn’t offset falling prices, then you will grow something else or leave your fields fallow, stop buying seed corn, and lay off your farm hand.

              Technology prices have dropped tremendously at the same time that both the supply of and demand for technology has grown exponentially.

              I think this is a case of “I don’t like the solution (namely the Fed), so I’m going to pretend the problem (deflation) isn’t a problem”. Instead, it would be more useful to discuss market-based solutions for deflationary cycles.

              1. What did a cell phone cost in 1990? What does it cost now? Productivity is inherently deflationary. You’ve fallen into the price support trap of the New Deal. Just because prices are falling doesn’t require production to fall. You even start to understand the point when you comment on technology.

                Corn costs $1/bu today and I grow 10bu. Next year I grow 20bu and prices fall to $0.60/bu. Did I lose? Am I poorer?

                1. A decrease the price of a product, or one group of products, is not deflation. Falling prices for many or most things in a self-reinforcing cycle is deflation.

                  I do not believe in price supports or Keynsian solutions, but I do believe it is misguided to say “falling prices for some product is the same as deflation” and “deflation is harmless”

                  If seed corn and the other inputs cost you $0.60/bu to plant and fertilize in the spring, then yes, you have lost a lot. As they say, I can break even in my armchair.

                  1. Please. Productivity growth means I get more from the same inputs. You may not like the meaning of the word but that doesn’t change it. Deflation is simply falling prices. Increased productivity all things equal causes unit prices to fall. But that fall is typically more than made up by increased volume either through an expansion of the market or by taking market share.

                  1. You might want to learn html in addition to some economics.

                    1. Hilarious!

        2. I don’t think inflation is good for the economy, but I do think that in a capitalist economy inflation reflects demand for investment capital. When there is growing demand, but a fixed supply, you get increasing prices, right? Same thing for currency. Again, in a capitalist system, market interest rates and inflation reflect the demand for currency. So moderate inflation indicates a growing demand for capital, and it tells producers that they might earn a profit because future prices for their products will be just a little higher than today’s prices.

          1. You’re confusing money supply with capital.

            1. No. The Fed thinkers with the money supply to respond to changes in the demand for capital. Inflation and deflation happen even in the absence of a central bank that manipulates the money supply.

            2. Suppose you have a capitalist economy with a fixed supply of currency, like the gold standard. You can still have inflation. How? Imagine that there is a high demand for investment capital, which drives up interest rates. So the cost of capital grows. Either it can squeeze out production that can’t afford the capital, or a market grows for goods that substitute for currency with less efficiency but at a lower cost, such as fungible assets (like silver), securitized debt products, credit lines, and so on. The introduction of the substitutes effectively grow wealth and the supply of investment capital which causes inflation.

              1. Now suppose you have an economy and instantly double the money supply overnight. Have you increased the capital stock at all? No, you’ve simply increased the accounting instrument which is all that money is.

                Money may represent capital at times but money is not capital.

                1. That is what I just said. Read it again.

                  1. No it isn’t. You just created new specie, i.e silver instead of gold. You still fundamentally do not understand money and capital.

                    1. Good for me. So enlighten us. Why is deflation good for the economy?

        3. Both inflation & deflation are problematic. Societies look for constant-value money if they can get it.

          Just as an expect’n of inflation leads people to get rid of the money that’s inflating, expect’n of deflation leads people to hoard that money, making it less & less useful as a medium of exchange.

          1. Fortunately a money made of bearer notes & acc’ts is at no long term risk of deflation, as long as the bank makes a profit from both seigneurage & transactions. If you let your money deflate, it becomes useful mainly to speculators, & then you’re not making money off transactions because nobody’s banking any more. With inflation you make money directly by, uh…making money, but you’ll lose business when people realize that & stop using your money. If you can keep the value of your money fairly constant, you’ll still make a little seigneurage as the economy grows, but you’ll also be making money on transactions at your bank (or ATMs or whatever).

            1. Also w deflation you’d effectively be adding to the interest you charge on loans.

  7. I beat inflation and all I got was this crappy economy.

    Yay, more wisdom from the anal blockage school of economics. Yes, we’ve beaten inflation and it only took China to import it from us and the US to suffer this astounding tepid 2% GDP growth.

    Is is the water in Chicago? Serious question.

    1. What? Our lackluster economy has nothing to do with a lack of inflation, despite what Keynesian and Monetarist clowns will claim. The problem is a massive glut of debt. I have no idea what China “importing” inflation even means.

      1. Here’s how the US exports inflation:

        1) Exporters allow the US to run a continuous trade deficit for decades.
        2) Central banks in the exporting nations inevitably expand their domestic money supply, using US$ as their reserve currency. They have to do this because the exporting firms in those countries have two choices: a) invest US$ from export sales abroad or b) convert US$ from export sales to local currency for local disposition. Most export revenues get the latter treatment, so ultimately the central bank must increase domestic money supply. If the central bank does not expand domestic money supply to sop up these US$, their local currency would increase in value versus US$, which is politically unpopular for a variety of reasons.
        3) The expansion of domestic money supply causes domestic inflation in the exporting country. The US, however, is insulated from inflation for the time being because the US$ are effectively sterilized when they are held as reserves in a central bank. BTW, this is also why the huge reserves at the Fed do not cause inflation here.

        1. Yup.

  8. There’s also the ‘inflation’ that Consumer Reports tracks–contents of mass-marketed food packages have decreased (e.g. 15 oz. packages that are the same size as older 16-oz. packages). Seems to be quite a bit of that these days.

    1. That’s been going on for a couple decades at least. Like an 8 ounce bag of potato chips from 1990 is now at around 3 1/2 ounces and costs twice as much.

  9. Many adults have never had the dread experience of watching prices rising rapidly across the board year after year.

    Meanwhile, the single highest expense for most people, housing, is through the roof in many places. Yay gas and TVs are cheap but people are blowing half their income on rent.

  10. “…former International Money Fund official Claudio Loser told the The Wall Street Journal.”

    Could he be the real-life inspiration for the song by Beck?

    1. Does Claudio wear beefcake pantyhose?

      1. Hey. Don’t go crazy on the cheesewhiz.

  11. Taming inflation???ty steady, as in na

    Look at this.

    Inflation was mighda over 100_ years, until the Fed came along. Rose during wars, deflated afterwards, as expected.

    Fuck the Fed.

    1. Dang, I switched keyboards momentarily, and look at that crap!

      What it was meant to is that if you look at that chart, there was basically no long term inflation at all until the Fed came along, except for the expected inflation during war and deflation back to normal afterwards. A dollar in 1800 was roughly the same as a dollar in 1900.

      Then the Fed tried to tame deflation after WW I, and would have loved to have done more a la New Deal but Woodrow Wilson had his stroke and no one took charge, so the 1920s roared instead of became the Great Depression ten years early. Once the Great Depression finally ended, years later than it would have without government interference, inflation became steady and upwards, long term at least, absent the usual wiggles.

      1. Before the Fed, inflation was regarded as a bad thing.

        Since the Fed, inflation is regarded as a good thing, unless there’s too much of it and then it is a bad thing.

        This is kind of like saying that, before the Fed, counterfeiting was regarded as a bad thing, but now a little bit of it, practiced by the right people, is a good thing.

  12. Inflation.

    I don’t think this word means what Chapman thinks it means.

  13. “A little inflation might be a good thing for growth.”

    Seriously? Wasn’t the Phillips Curve nonsense pretty much debunked in the 1970s?

    Is the reprinting of this article at Reason sort of like the way the Wall Street Journal used to run op-eds by Al Hunt and Thomas Frank?

    1. I understand that the US government can always be trusted and is never wrong, so I understand that everybody else in the US is experiencing very little inflation. Apparently Americans only spend money on gasoline and smart phones. Energy and tech inflation has been very low, even negative after hedonic adjustment. Unfortunately for me, ObamaCare and state auto insurance laws mandated that huge fraction of my annual be dedicated to insurance premiums. Apparently, I’m one of the few people who actually pays the unsubsidized, market price for health insurance and the number of uninsured drivers keeps cost of car insurance low for the average urban consumer. I conclude this because, the 45% and 12% annual increases in these two categories overshadow any savings I get at the Exxon station or the Verizon store. And, don’t get my wife started about grocery prices: her only consolation is that the lower gasoline prices make it cost-effective to drive to WalMart instead of a nearby, higher-quality grocery story. I doubt that there is a hedonic adjustment for that, however. We also used to like to go out to eat, but have you been to a restaurant lately? I doubt that there is a substitution adjustment that increases the CPI to reflect the fact that the change in same-store restaurant revenues is meager despite significantly higher menu prices. Cost of services, especially local municipal services, has also been rising briskly, as have my property taxes and insurance costs.

      1. Apparently, I’m one of the few people who actually pays the unsubsidized, market price for health insurance and the number of uninsured drivers keeps cost of car insurance low for the average urban consumer.

        Medical insurance doesn’t seem to be part of the CPI. In fact, a lot of the stuff that has gotten expensive due to government mandates is “paid for” by the employer. That means it doesn’t count towards inflation, and at the same time it depresses wages.

        The whole CPI and inflation bit is a sham anyway, something for Keynesians to get pushed out of shape about. You can’t compare a “basket of good” from 20 years ago to a basket of goods from today; everything has changed. Money is used for short term exchanges, not for keeping wealth around. So if its value changes, nothing really changes in the economy long term. The only problem is that we use money as a measure of value in long-running contracts, and those are affected by changes in the value of money. But maybe we should just write our contracts differently.

        1. I don’t have an employer who is paying for medical insurance. I pay it myself. And employers are just acting as middlemen on behalf of employees: employees are paying for it with lower wages.

  14. Baby boomers were raised on lurid tales of hyperinflation in 1920s Germany, when consumers had to carry piles of money in wheelbarrows to do their normal shopping. That wasn’t the worst of it. The trauma, we were taught, led to the rise of Adolf Hitler.

    Well, this time around, lack of inflation and stagnating middle class wages due to increasing taxes and government mandates will lead to the rise of another progressive, Bernie Sanders. While the problem is different, his solutions are pretty much the same. Let’s hope President Sanders will be less genocidal than his predecessor.

    1. If Tony is any indication, we can all expect to be lined up against a wall not too long after his election.

  15. Weird article Steve. Are you intentionally being obtuse? We have asset price inflation and commodity price deflation. The Markets are inflated. Property values are inflated. Higher education is inflated. Health care / insurance costs are inflated. All of this is easily traced back to the government’s manipulation of economic activity and the money supply.

    Let’s not forget – Price inflation is really best described as “Prices aren’t going up, the value of the currency is going down.” Central banks have been trying to convince people that it is best if the money they have earned (and saved) is intentionally made less valuable to the tune of 2% per year.

    I really don’t get the point of your article or its wimpy and insulting conclusion-like offering. Are you just trying to inform us as to how you feel about people’s inflation worries? That sounds like something best done on twitter.

  16. I don’t care which scam artist finally gets elected, or which doesn’t, nor what the Fed does/does not do, nor whether, according to Mr “investment advisor with a claimed “near perfect prediction record” [insert advisor name of choice] , we are supposedly in for recession, depression, deflation, hyper inflation, a stock market boom, or whatever .

    Why? Because whatever happens, my entirely self-managed, fully diversified, once per year adjusted long term savings plan will be safely protected and will , 9 times out of 10, grow at an average of 8% per annum over and above the prevailing inflation [or deflation], rate, year in, year out, as it has since 1986 when I started using it.

    Savings plan results 1972-2011: http://onebornfreesfinancialsa…..gspot.com/

    Regards,onebornfree

    1. ARR LANDLUBBERS, IF YE FAIL TO FOLLOW YER CAP’N AND HIS SOUND FINANCIAL ADVICE, YE’LL BE WALKIN’ THE PLANK

  17. Inflation is caused by more money in the money supply. More succinctly in the common money supply. The Fed has dumped Trillions into the money supply, but it has stayed in the uncommon money supply. In effect there are two currencies firewalled from each other, for now anyway. What this has created is a different method to control the economy, markets, and influence. After a reserve of money exceeds the amount for needs and wants (including a middle class savings), money becomes power. And there’s a whole secondary currency that has been created over the last ten years that buys and sells control and influence. So we don’t suffer major debasement but it has come at the cost of an elite that is not economically, fiscally, or monetarily connected with us. So, the rich getting richer isn’t necessarily a problem if it supplying goods and services at market. The richer getting more powerful outside of market forces is a deep concern.

  18. Sounds like what our government is doing just at a slightly slower pace that is until the next democrat is elected and the repubs continue to bow down to them and the media

  19. As a result, they ignore the new danger, which takes the form of deflation and slow growth.

    You’re an economic vegetable. I could explain why deflation is a good thing, duh, but why bother?

    Also, in 2011 at CPI of 2%, if we measured that in 1980s terms, it would be more like 10%.

    http://www.cnbc.com/id/42551209

    I’m not sure where it would be right now, but I would imagine it would be similar…

    But governmental statistics would never try to hide something that makes their rulers look bad, right? Must be a coincidence…

    1. Must be a coincidence…

      You misspelled KKKochspiracy.

  20. I bought brand new BMW by working ONline work. Six month ago i hear from my friend that she is working some online job and making more then 98$/hr i can’t beleive. But when i start this job i have to beleived her

    ??????? —— http://www.HomeJobs90.Com

  21. Google pay 97$ per hour my last pay check was $8500 working 1o hours a week online. My younger brother friend has been averaging 12k for months now and he works about 22 hours a week. I cant believe how easy it was once I tried it out.
    This is wha- I do…… ?????? http://www.buzznews99.com

  22. How the fuck do they measure inflation? Every year my electricity costs more, my cable costs more, my cell phone service costs more, my health insurance costs a lot more, my other insurance costs more, my property taxes go up, groceries cost more, booze costs more… about the only thing that costs less right now is gas and heating oil, but that can change any time. Fuck anyone who says there’s little or no inflation. Give them the Giuliani treatment.

  23. If Chapman thinks price inflation is a thing of the past, he obviously doesn’t buy his own groceries.

  24. We want real money whose value never changes.

    There is a place with just such a system. It is called Utopia.

    1. I want massive deflation. I’d be rich.

  25. “Treat all economic questions from the viewpoint of the consumer, for the interests of the consumer are the interests of the human race.” – Frederic Bastiat (via Mark Perry’s blog)

    Why are we going along with the assumption that deflation is a bad thing or an impediment to growth?

    1. Chronic deflation = unemployment = less consumer spending = less production = more unemployment = less consumer spending = tears in my beer ’cause I’m crying for you dear….

      Despite what Skippy says, cheaper cell phones or computers is not the same thing as deflation.

      Democrats think that cheaper (or free) stuff is always better, and businesses will somehow “figure it out” and make $, no matter the economic (or regulatory) circumstances. But, No Free Lunches in the real world. Don’t be a Democrat, oppose deflation.

  26. “…like communism, it’s no longer much of a threat.”

    So here in the communist US where we have record deficits, high unemployment, an invasion by illegal aliens, a surveillance police state, cops who are free to murder whenever they want, a crimnal government, and much much more – communism seems like it is the threat to freedom it always has been.

  27. The way “inflation” stats are calculated, seem as bogus as those for calculating the unemployment rate.
    Anyone who buys groceries knows that prices have nearly doubled in the past ten years….but the gubmint says, “no inflation.”

  28. I came to libertarianism through Ron Paul and Austrian economics, so I must say I’m very surprised to see praise for the Federal Reserve or inflationary monetary policy in general in a libertarian magazine. From what I understand about inflation and deflation, they are not inherent evils to be fought with interventionist monetary policy, but they are simply aspects of the market’s tendency to self-correct when there are imbalances in supply and demand. If prices are rising or falling, the best thing government can do is to stay out of the way and let the market iron out its wrinkles. Pumping money into the system to cure deflation only sets the stage for inflation later on, while sucking money out of the system to cure inflation only sets the stage for later deflation. No central bank can excel the market in wisdom, and no Fed chairman, no matter how illustrious his academic career, can know better than the market about when to create money and when to destroy it.

  29. Here is a list of things that are at or near record high:

    electricity
    stocks
    rent
    houses
    the price of bonds
    eggs
    beef
    college tuition
    medical care
    new car prices

    Nope – cannot find any inflation here.

    1. Exactly. What economy are these guys measuring, Skyrim’s?

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