Renewable Revolution

(From the inflation article you referenced.)


This seems to me to be the salient sentence in the Mises Institute article:


When the Federal Reserve Banks bought the government's 2½% bonds, say, at par, they held down the basic long-term interest rate to 2 percent. And they paid for these bonds, in effect, by printing more money. This is what is known as "monetizing" the public debt. Inflation goes on as long as this goes on.

If almost all the money the Fed created went into the the current equity market bubble, which is badly leaking now and apt to burst, taking the major stock indexes back to some point as far below the mean as they are above it now, then all the phony money the Fed created goes up in smoke. That, my expert friend, is most assuredly NOT inflation.

I think right there is where the traditional understanding of inflation fails to explain our current circumstances.

I am listening to Alisdair now. I hear him talking about the Fed having to helicopter money, which is something I mentioned earlier in this thread last week, and which you stated unequivocally would not occur.

Your suggestion that my fallacious thinking is the result of someone or another's mentoring here or elsewhere is wrong. Fallacious or not, it's based on my own critical thinking skills, and it's an attempt to put the big picture together by engaging in an open discussion of what we see happening in the real world.

I notice that any time I might say something that questions your world view, you react in a personal way, impugning my mental faculties, which I don't appreciate. You're much better at that than you are at making real arguments, which is what I'd much rather engage in, in a thread like this one.

I don't argue that the ultimate end game of currency debasement is a recipe for a fast economic collapse and a hyperinflation. But as Alisdair himself says in this interview you posted, we are not nearly there yet. Selfishly, what I want to understand is a roadmap for how to negotiate the near term future.

The currency wars are rewarding savers of USD cash money at the moment, in a very big way, for those with the means to exploit the arbitrage opportunities to exchange some of their fiat for real goods and for gold, too.

We are also experiencing real and easily measurable deflation at the moment, by nearly any reasonable metric. Commodities say we have had steady deflation for five years. The velocity of money is dropping faster than it did between 1929 and 1932. Welcome to Reality Check 101.

Eddie,
So how come the average Joe used to be able to take a two week to one month vacation each year and own a car and house too, but NOW they can't while YOU still can?     

Maybe you want to attribute it to your education and business smarts. I am not trying to impugn your intelligence or ability, but I am, right there with GO, claiming you are engaging in self serving rationalizing. 

When I was a kid, doctors and dentists MOSTLY lived a middle class existence. Something has gone very wrong since then. That "something" involves, to a high degree, inflation caused buying power erosion of people on wages or pensions. 

But there is more to that society destroying inequality calculation. That is the FACT that professionals who own their businesses are exceeding in their buying power, not just published inflation, but actual inflation. They became much wealthier, as a group, than professionals with the SAME level of education and intelligence as peers on wages in a hospital or prison or military service setting.

Health care has become more of a business than a vocation. That is wrong, Eddie. There is no socially valid reason for a doctor or a dentist be remunerated any better than they were when most of them were middle class in the 1950's.