7 ms·

> The wage-price spiral theory of inflation is bunk. Inflation is caused by the devaluation of excessive printing of money. is that the only possible cause?

dragonwriter 4y ago
> is that the only possible cause? No, its is a definitional axiom of certain “economic” religious sects, like the Austrian school. In a sense, since prices are a product of a number of factors including money supply, you can always construct a hypothetical alternative monetary policy which would prevent inflation, so any inflation can dogmatically be constructed to be a consequence of too-loose monetary policy.
- WalterBright 4y ago
  Religion? You'll have to do better than that. Meanwhile, what's your take on the historical fact that gold rushes (when money was backed by gold) resulted in inflation? What's your take on the fact that the US had net zero inflation from 1800 to 1914, and endemic inflation ever since (except for a brief period during the Depression)? And why are oil price hikes always blamed for inflation, but when oil prices fall there's no deflation? Let's face it. Inflation is the result of the Fed policy of "spend all you want - we'll just print more!"
  - dragonwriter 4y ago
    > Religion? You’ll have to do better than that. The Austrian school is expressly, overtly, an unashamedly ideologically normative rather than empirically descriptive, which is why they are the example I cited. > Meanwhile, what’s your take on the historical fact that gold rushes (when money was backed by gold) resulted in inflation? That money supply changes can cause inflation is not the same as all inflation being the fault of money supply changes. > What’s your take on the fact that the US had net zero inflation from 1800 to 1914, and endemic inflation ever since (except for a brief period during the Depression)? Well, that its false, there have been brief deflationary periods far more recently than the Great Depression (the most notable recent one, though not actually the most recent, being during the Great Recession.) > And why are oil price hikes always blamed for inflation, but when oil prices fall there’s no deflation? Oil price falls can lead to deflation (IIRC, that was the main cause of the brief, slight 2015 deflation). > Let’s face it. Inflation is the result of the Fed policy of “spend all you want - we’ll just print more!” A baseline bias to low inflation is a deliberate policy goal of the Fed (and basically every central bank, its not something unique about the Fed); that doesn’t mean every instance of actual inflation is accurately solely attributable to monetary policy as the cause. There are some inflation spikes that are due to factors like exogenous supply issues, there are others that are due to monetary policy miscalibration. The latter are more easily resolved, as demonstrated by the intense–but brief–post-COVID-recession inflation spike. (Which was, while there were other factors which contributed to it, largely caused by the failure to sufficiently-quickly dial back monetary stimulus in the rebound from the brief-but-sharp COVID recession.)
    - WalterBright 4y ago
      > that its false It's true. It had its ups and downs, and wound up just about where it started in 1914. Upward ever since. > brief deflationary periods You're nitpicking. https://www.in2013dollars.com/current-inflation-rate https://www.in2013dollars.com/current-inflation-rate Take a good look at it. The dollar has decreased in value since 1940 by a factor of THIRTY. Can you really explain that with the price of oil? Do you wonder why the inflation calculator starts at 1913? https://www.bls.gov/data/inflation_calculator.htm https://www.bls.gov/data/inflation_calculator.htm > A baseline bias to low inflation is a deliberate policy goal of the Fed And thus you admit that it's the Fed causing inflation.

dragonwriter 4y ago

> is that the only possible cause? No, its is a definitional axiom of certain “economic” religious sects, like the Austrian school. In a sense, since prices are a product of a number of factors including money supply, you can always construct a hypothetical alternative monetary policy which would prevent inflation, so any inflation can dogmatically be constructed to be a consequence of too-loose monetary policy.

WalterBright 4y ago
Religion? You'll have to do better than that. Meanwhile, what's your take on the historical fact that gold rushes (when money was backed by gold) resulted in inflation? What's your take on the fact that the US had net zero inflation from 1800 to 1914, and endemic inflation ever since (except for a brief period during the Depression)? And why are oil price hikes always blamed for inflation, but when oil prices fall there's no deflation? Let's face it. Inflation is the result of the Fed policy of "spend all you want - we'll just print more!"
- dragonwriter 4y ago
  > Religion? You’ll have to do better than that. The Austrian school is expressly, overtly, an unashamedly ideologically normative rather than empirically descriptive, which is why they are the example I cited. > Meanwhile, what’s your take on the historical fact that gold rushes (when money was backed by gold) resulted in inflation? That money supply changes can cause inflation is not the same as all inflation being the fault of money supply changes. > What’s your take on the fact that the US had net zero inflation from 1800 to 1914, and endemic inflation ever since (except for a brief period during the Depression)? Well, that its false, there have been brief deflationary periods far more recently than the Great Depression (the most notable recent one, though not actually the most recent, being during the Great Recession.) > And why are oil price hikes always blamed for inflation, but when oil prices fall there’s no deflation? Oil price falls can lead to deflation (IIRC, that was the main cause of the brief, slight 2015 deflation). > Let’s face it. Inflation is the result of the Fed policy of “spend all you want - we’ll just print more!” A baseline bias to low inflation is a deliberate policy goal of the Fed (and basically every central bank, its not something unique about the Fed); that doesn’t mean every instance of actual inflation is accurately solely attributable to monetary policy as the cause. There are some inflation spikes that are due to factors like exogenous supply issues, there are others that are due to monetary policy miscalibration. The latter are more easily resolved, as demonstrated by the intense–but brief–post-COVID-recession inflation spike. (Which was, while there were other factors which contributed to it, largely caused by the failure to sufficiently-quickly dial back monetary stimulus in the rebound from the brief-but-sharp COVID recession.)
  - WalterBright 4y ago
    > that its false It's true. It had its ups and downs, and wound up just about where it started in 1914. Upward ever since. > brief deflationary periods You're nitpicking. https://www.in2013dollars.com/current-inflation-rate https://www.in2013dollars.com/current-inflation-rate Take a good look at it. The dollar has decreased in value since 1940 by a factor of THIRTY. Can you really explain that with the price of oil? Do you wonder why the inflation calculator starts at 1913? https://www.bls.gov/data/inflation_calculator.htm https://www.bls.gov/data/inflation_calculator.htm > A baseline bias to low inflation is a deliberate policy goal of the Fed And thus you admit that it's the Fed causing inflation.