4 ms·
It really isn't, you're right. Historically, inflation always meant inflation of the money supply. Its definition has changed over time and you've been swindle
by beaner 6y ago
It really isn't, you're right.
Historically, inflation always meant inflation of the money supply. Its definition has changed over time and you've been swindled.
If you have a name for something, name the root cause, otherwise you're obfuscating its study, and perpetuating the non-identification of the root cause.
"Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term `inflation' to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation. . . . As you cannot talk about something that has no name, you cannot fight it. Those who pretend to fight inflation are in fact only fighting what is the inevitable consequence of inflation, rising prices. Their ventures are doomed to failure because they do not attack the root of the evil. They try to keep prices low while firmly committed to a policy of increasing the quantity of money that must necessarily make them soar. As long as this terminological confusion is not entirely wiped out, there cannot be any question of stopping inflation." [0]
[0] https://mises.org/library/defining-inflation https://mises.org/library/defining-inflation
- ximeng 6y agoIsn’t the issue exactly that money supply is increasing decoupled from the real economy? This is why quantitative easing hasn’t particularly increased consumer prices, which are one important indicator of value.
- beaner 6y agoMoney supply rarely goes directly to consumers, it first has to be spent by the receiving parties and distributed to the wider economy before consumer prices begin increasing. But it doesn't happen without the prerequisite of money being printed.
- ximeng 6y agoThat hasn’t happened though - money has gone to corporations and asset holders. It hasn’t trickled down to consumers. Banks aren’t lending to small businesses.