I’m sure all of us here have heard the announcement that Bernanke made the other day regarding inflation. He believes that consumers are not spending, but instead are saving too much. Typical Keynesian, he now has plans to further inflate to get all of us spending.
How is he going to achieve this goal? Please shed some light. I am guessing it has to do with QE2, but of course QE1 didn’t work too well. What other options is on the table for uncle Ben?
Does anyone here remember the 1970’s inflation? I was reading how people rushed to the stores to buy goods before their money depreciates further. Comment on this as well? If you have lived through that period, let all of us of your situation.
The only thing anyone was rushing to buy that I remember was gasoline. And that is because that schmuck Nixon imposed rationing on petroleum. Then that joke Carter not only kept it going but made the whole thing worse.
It is impossible to create a shortage without government intervention. The 70s prove that. Just be alert, the next big shortages are coming in health care and pharmaceuticals.
It’s not impossible to create shortages without government. They are usually just mild inconveniences by comparison, though. Of the “oops, we didn’t predict that much demand” sort.
Without government force, prices rise, suppliers create more and consumers conserve or find substitutes. This will take time and consumers will not be happy with prices increases but the market will clear. There will not be the lines and waiting that gas consumers experienced in the 70s or where health care consumers in Canada and the UK and soon to be USA experience.