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Because it's just a coincidence that we have soaring inflation after a couple of years of greatly increasing the money supply and keeping interest rates low whi

• incomingpain 4y ago
  While it's obvious that milton friedman is right, you concisely make the case. I think the blog does actually discover a possible additional rule. As inflation takes off there are winners like gasoline who are going to be earning big money suddenly and they can give raises to their people, retain people, and also even politically lobby and so you have an associated political power structure created. Alberta for example just won big and this blogger sees why. Whereas the federal government have been actively attacking them for years. They haven't been feeling on the team for quite some time.
• jfengel 4y ago
  We've been increasing the money supply and keeping interest rates low for a decade and a half. Even the "paying people to stay home" step happened two years before the actual inflation showed up -- and has long since ended when the inflation finally did happen. Friedman has no explanation for the fact that we've been pumping money into the economy for a very long time without consumer price inflation. So it doesn't benefit his argument to claim victory when inflation finally did occur -- especially when there's another, more direct cause in supply chain shutdowns. The Fed is starting to raise rates -- and it should have done so a long time ago. It wasn't raising consumer prices, but it was pumping asset markets. None of the money was making it to ordinary consumers.