I think perhaps he has his mises account set to receive e-mail replies whenever someone replies to his thread? Maybe that’s why he was asking people to stop e-mailing him and why he responded that way.
debtus:
I’m not sure I changed my view. It can be debated what ‘printing means’. My version of printing is taking on debt from the world at just about zero interest in short term Gov’t bonds which the auctions are still oversubscribed and then going to buy their own long term bonds to drive down rates, buy off callable bonds and so forth. The credit they are giving the banks for bailouts is not being loaned, therefore printing AT THIS TIME, is not happening. The banks in turn are buying Treasuries as to what their Charters and regulations require. You try and get a loan and see what the terms are. Now could banks end up loaning the money? Could there be hyperinflation? Could the US Government monetize and devalue the dollar to worthless paper? Sure they could but I strongly believe that will not happen. I read John Williams Inflation report and I don’t have the time, nor am I getting paid to discuss it line and verse but the very first line says it all.
The Federal Reserve is expanding it’s balance sheet. The only way it can do this is by printing money.
You say,
I’m not sure what the entire media is saying. It does not matter to me.
Then you say,
So because people talk about inflation on TV, that means it won’t happen? Well, I hate to break it to you, but I’ve heard countless stories about deflation on TV.
I can’t follow.
In terms of me, ‘not wanting to hear about inflation’
That’s not the case, I wanted to see if anyone here is different to anything else I hear in the mainstream about inflation. …..Not really.
The point is what the media says is irrelevant to the entire matter. You made it a point to bring up how the media is talking about inflation, and how that it somehow makes the argument that we may actually have inflation illegitimate.
Logic rarely has anything to do with decisions made by governments and central banks. Actually, I would argue fallacious thinking more often motivates the government/Fed to action rather than logical thinking.
You must have read Bernanke’s helicopter speech. I may be wrong, but I haven’t heard him, Geithner, or Obama talk about bank nationalization as a serious possibility.
Please explain how prices can go to the moon if no one has any dollars? The first chapter of econ 101 explains supply and demand. If the supply decreases which I’m sure it will in a panic some prices may go up BUT if no one has dollars to purchase goods then what? What is in oversupply will fall to meet dollars/demand. Cars are going to see a super inflation? Homes are going to see a super inflation? With no jobs oil and gold are going to see a super inflation? Please help me understand, what are you talking about?
The Fed prints money.
The Fed buys X with printed money. (X=Oil,gold,wheat,houses,bad debt, anything!!!)
Sellers of X receive new money
Sellers of X start spending new money.(Sellers may hoard money, but at some point, the marginal utility of hoarding dollars will become less than the marginal utility of spending dollars.
Continue ad infinitum.
I’m not sure you understand how printing + monetization works. If I hold 10 ounces of gold and can currently receive ~$9000 for 10 ounces, what happens if the Fed comes out and offers $10000 of new money/ounce for gold (which they can at any time)? Suddenly, I have $100000 which came from printed money. I then begin to spend that money on food, gas, possibly housing or cars. It doesn’t have to be gold that they buy, it could be ANYTHING! The supply of dollars can be easily increased through monetization of assets.
It does NOT matter if there is unemployment. Take a look at Zimbabwe. Their hyperinflation occured with 20%+ unemployment and now they have somewhere around 80% unemployment. Unemployment hasn’t done a damn thing to stop inflation aka increases in the money supply.
Lastly, I’m not ‘dismissing’ a runaway boom, I’m just damn sure we first have a deflationary depression and that’s where my money is. …what happens after that, I don’t know, I’ll tell you after this chapter unfolds.
Well, since you have little idea of how monetization works, I wouldn’t expect you to expect anything other than deflation.
I agree with your comments.
However there are cases where inflation occurs due to a sudden increase in productivity of economy. As people will have that extra saved resources which may cause price increase. therfore there is some truth to the comment “employment increases inflation”. But that is a very exceptional case.
Most of times its increased suply of money that causes inflation. which is what you have pointed out.
inflation is shorthand for inflation of the money supply. if productivity increases and money supply is unchanged then there will be price deflation.
even if money supply does not chage, due to increased productivity in one item people would have that x dollars to spend extra. thus they would be willing to bid (X ammount) higher price for other product which is inflation (rite?)
No, that’s not inflation. With a fixed quantity of money, if holders of money suddenly all choose to buy one item then the price of that single item will go up. But money won’t simultaneously be buying other things so prices of other things will drop. Overall, big picture, the prices will be stable. With expanding money supply everyone has money to buy everything else while prices are rising for the single item. So no prices fall while single item prices rise.