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> The US had zero net inflation from 1800 to 1914. This is just absurd. Not only is this a period so different than a modern economy that it's not useful for c

> The US had zero net inflation from 1800 to 1914. This is just absurd. Not only is this a period so different than a modern economy that it's not useful for comparison, but during that period it was a roller coaster of inflation and deflation, both of which are terrible for people. Those curious can see the volatility here: https://commons.wikimedia.org/wiki/File:US_Historical_Inflation_Ancient.svg https://commons.wikimedia.org/wiki/File:US_Historical_Inflat...

WalterBright 4y ago
> This is just absurd. Not only is this a period so different than a modern economy that it's not useful for comparison, I hear that a lot. Nobody is ever able to explain what law of economics changed in 1914. The Law of Supply & Demand was just the same as it always was. > but during that period it was a roller coaster of inflation and deflation, both of which are terrible for people. Those curious can see the volatility here: https://commons.wikimedia.org/wiki/File:US_Historical_Inflat https://commons.wikimedia.org/wiki/File:US_Historical_Inflat... All of the spikes were the result of the US government meddling with the economy (such as bimetalism and other nonsense, see Friedman's "Monetary History of the United States"). Except for the big one, coincidentally coincident with the California gold rush. Or is that a coincidence? Tons of gold flooding into the economy, what would the consequence of that be? Hmmm.
- wpietri 4y ago
  This is a straw man: > what law of economics changed in 1914 Again, you're just ignoring the fact that our most stable period of low inflation was under fiat money. And that wasn't just true here. Central banks with well-managed money supplies brought price stability to many countries. I understand that goldbuggery is a religion, which like many religion requires ignoring inconvenient facts. You're welcome to keep proselytizing, but if you do, I'll take my leave.
  - WalterBright 4y ago
    > the fact that our most stable period of low inflation was under fiat money. And that wasn't just true here. Central banks with well-managed money supplies brought price stability to many countries. Milton Friedman in "Monetary History of the United States" shows with graphs and charts that the instability was higher under the stabilizing hand of the Fed. What the Fed brought was an upward bias to it. > I understand that goldbuggery is a religion All I'm pointing out is the true cause of inflation. The voodoo is all the other theories trying to deny what it is. As for stability, is that what you call the last year? All under the enlightened hand of the Fed. Prices in the supermarket have often doubled in the last year. > Central banks with well-managed money supplies brought price stability to many countries. Have they? Compared to what? Which countries since 1914 did not have a fiat money system?
    - wpietri 4y ago
      Ah yes, the religious person cites religious texts: > Monetary History of the United States That book covers only through 1960, ending 20 years before the low-inflation era I'm talking about. Friedman retired from teaching before the era even started. So yes, I am definitely done here.
      - WalterBright 4y ago
        I do enjoy the contention that the laws of economics changed in 1960. Nor does "low" inflation prove that inflation is not caused by running the printing press. And nor is "low" inflation actually low. Going through my dad's estate, I'm reminded of how much cumulative inflation there's been since 1980. A 1980 dollar is worth $3.14 in 2020. https://www.usinflationcalculator.com/ https://www.usinflationcalculator.com/

WalterBright 4y ago

> This is just absurd. Not only is this a period so different than a modern economy that it's not useful for comparison, I hear that a lot. Nobody is ever able to explain what law of economics changed in 1914. The Law of Supply & Demand was just the same as it always was. > but during that period it was a roller coaster of inflation and deflation, both of which are terrible for people. Those curious can see the volatility here: https://commons.wikimedia.org/wiki/File:US_Historical_Inflat https://commons.wikimedia.org/wiki/File:US_Historical_Inflat... All of the spikes were the result of the US government meddling with the economy (such as bimetalism and other nonsense, see Friedman's "Monetary History of the United States"). Except for the big one, coincidentally coincident with the California gold rush. Or is that a coincidence? Tons of gold flooding into the economy, what would the consequence of that be? Hmmm.

wpietri 4y ago
This is a straw man: > what law of economics changed in 1914 Again, you're just ignoring the fact that our most stable period of low inflation was under fiat money. And that wasn't just true here. Central banks with well-managed money supplies brought price stability to many countries. I understand that goldbuggery is a religion, which like many religion requires ignoring inconvenient facts. You're welcome to keep proselytizing, but if you do, I'll take my leave.
- WalterBright 4y ago
  > the fact that our most stable period of low inflation was under fiat money. And that wasn't just true here. Central banks with well-managed money supplies brought price stability to many countries. Milton Friedman in "Monetary History of the United States" shows with graphs and charts that the instability was higher under the stabilizing hand of the Fed. What the Fed brought was an upward bias to it. > I understand that goldbuggery is a religion All I'm pointing out is the true cause of inflation. The voodoo is all the other theories trying to deny what it is. As for stability, is that what you call the last year? All under the enlightened hand of the Fed. Prices in the supermarket have often doubled in the last year. > Central banks with well-managed money supplies brought price stability to many countries. Have they? Compared to what? Which countries since 1914 did not have a fiat money system?
  - wpietri 4y ago
    Ah yes, the religious person cites religious texts: > Monetary History of the United States That book covers only through 1960, ending 20 years before the low-inflation era I'm talking about. Friedman retired from teaching before the era even started. So yes, I am definitely done here.
    - WalterBright 4y ago
      I do enjoy the contention that the laws of economics changed in 1960. Nor does "low" inflation prove that inflation is not caused by running the printing press. And nor is "low" inflation actually low. Going through my dad's estate, I'm reminded of how much cumulative inflation there's been since 1980. A 1980 dollar is worth $3.14 in 2020. https://www.usinflationcalculator.com/ https://www.usinflationcalculator.com/