Austrian says we will have deflation?

[wnewell]

http://libertarianpapers.org/articles/2010/lp-2-43.pdf

[DanielMuffinburg]

Inflation has gone up since he wrote that article.

[MayDay]

that is a pretty good article. Something i’ve noticed about Austrian writers…they love to give history lessons. lol. I’ve kind of thought that deflation would be the result of derivative debt not being paid and having the fed replace bad assets with cash; because of the leveraging that is done with fictitious capital.

I think he is wrong when he states that the FED directs the monetary legislation. It may be that way on paper, but in practice the politicians and the central bankers have a symbiotic relationship. And if a banker wants to keep his job he’ll behave the same way as a politician (albeit different avenues) by pretending that everything is under control and that there is nothing to worry about.

He also takes Rothbard a little out of context, to my understanding.

Yet Rothbard undermines his own argument by recognizing that in all the cited instances of hyperinflation, monetary policy was controlled by a Treasury—i.e., by the political class.

Rothbard readily admits that it matters not what ‘class’ controls the printing press; they will print. He is assuming that bankers are not dumb or nefarious. Both of which could be true.

Unlike the political class, the banking class is savvy enough to recognize policies that will lead to mass inflation and the death of the monetary system from which it parasitically profits.

This is a heavy posit that one group is smarter than the other. It doesn’t seem to take into account the nature of transnational banking and it’s desire for world market and the strategies that banks use to sheer assests away from other entities and make societal changes. Something, that it seems, big banks are versed in.

Yet it would be misleading to conflate the beliefs and motivations of Ben Bernanke qua academic with the actions of Ben Bernanke qua Federal Reserve Chairman. For instance, Chairman Bernanke’s predecessor Alan Greenspan wrote trenchantly on the need for a gold standard, explaining that “[in] the absence of the gold standard, there is no way to protect savings from confiscation through inflation”77. One might have concluded that from his personal desire for a gold standard, Greenspan

So, can they be corrupted by their position?

I, also, thought that the fear of massive inflation comes from when foreign banks don’t want to hold their reserves in $USDs. Is that right? They come flooding into the market andsince no one wants them they end up in US bank coffers and THAT is a way that credit expansion (bank loans) will take place AFTER a rise in reserves (instead of vice versa as the author says).