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This graph seems off to me. I have a hard time believing the 80 years from 1665 to 1745 were a period of constant deflation.
by pg 17y ago
This graph seems off to me. I have a hard time believing the 80 years from 1665 to 1745 were a period of constant deflation.
- deleted 17y ago[deleted]
- cperciva 17y agoIf you look carefully, it's not constant deflation in that period -- over those 80 years there's an average deflation rate of 0.6%, but at many points the price index jumps 10% above the trendline. I find these numbers to be entirely believable -- after all, this is a period when the American Colonies are expanding rapidly, with resulting effects in terms of specialization of skills and self-sufficiency. It's going to be far cheaper to have something produced in 1745 by the local expert X-maker than it was to import the same item from Britain in 1665.
- deleted 17y ago[deleted]
- ivankirigin 17y agoBoy is that not the story here. It's what happens after WWII. There is pretty much no measure of currency that will change this basic story, which has two parts: USD as a reserve currency post Bretton Woods, and abandoning the gold standard giving notes no intrinsic value.
- barrkel 17y agoGold has no intrinsic value either; its value is barter value, what other people believe it's worth. Fiat money is no different; its value is barter value, what other people think it's worth, which includes how much they trust the issuer not to debase it.