Help Debating ACC eliteists in the Austrian School of thought and The Fed

Economics Economics Questions
1

I am relatively new and educating myself in the Austrian School of economics. A spirited is debate taking place at the following forum and I am my best to hold up my end. Could you folks give me a little input on the debate taking place?

http://accboards.com/forums/showthread.php?tid=12811

Thanks

2

Seems hopeless to me.

3

Thanks for taking a look Spideynw.

Well you could basically skip to the second page. I am trying to understand Byrdy’s argument that the devaluation of the dollar and the formula that was used to show this are both irrelevant because it “assumes that wages and returns on savings have grown at 0%.”

4

Does anyone have Anything to offer?

5

Byrdy points out that while the purchasing power of the dollar has declined, nominal wages and revenues have also increased equally, thus offsetting the devaluation.

First, he needs to prove this. Especially for interest on savings. Is price inflation offset by the interest you get on your savings account? I doubt it.

Second, we need to take into account what might be called the Cantillon effect. When central banks create money, those who get to spend it first benefit the most, at the expense of those who get it last. In our case, this means banks, politically connected corporations and the state win at the expense of middle-class and working individuals. In other words, while Joe Sixpack in 2009 receives a wage calculated in 2009 money, primary receivers of Fed money spend in 2010 terms, thus devaluing Joe’s income.

Third, ask them why we should inflate in the first place if it merely results in a nominal increase in everyone’s monetary stock. What’s the point? They act as if inflation is this natural phemonenon that only hillbilly ignorami despise, but seriously, why have a central bank and continually increase the money supply if it’s just increasing numbers across the board?