Wikinvest Wire

Inflation explained

Tuesday, December 16, 2008

While waiting for the new inflation initiatives to be announced by the Federal Reserve in about an hour, via 24hGold comes the following Depression-era explanation of why inflation is our only hope in the current crisis.


"What inflation has done before, inflation can do again. Happy days are here again."

9 comments:

Anonymous said...

Has anyone seen the Fred Thompson vid? I got to it via Mish here:

http://globaleconomicanalysis.blogspot.com/2008/12/bernanke-explains-quantitative-easing.html

It is LOL-ROFL sikkkk! He or whoever wrote it for him is channeling Ron Paul.

Tim said...

Yeah, it's pretty good - here's a direct link

Anonymous said...

Wow, this is a very clear explanation of the many, many benefits of inflation! If only I had known how absolutely evil it is to save money, invest it and expect a fair return, I would have given this vile practice up years ago! All these years of saving money I have unwittingly been no better than a cartoonish mustache-twirling usurer.

Justin said...

And we all know how this whole inflation thing worked out in the 30s ...

Shane said...

Sooo... I am thinking I need to stock up on everything I can before the dollar drops and price skyrocket...?

Anthony said...

Justin - inflation wasn't the problem in the US in the 30s, Depression was. Hyperinflation was a problem in Germany, but that was not related to the US leaving the Gold Standard.

CTMM said...

Sooooooo.....

What happens when you trigger an inflation cycle, but all those steel pipes and rubber tires etc. etc. are made in China?

I'd say you're screwed. Time for a trade war!

Eiseley said...

"If only I had known how absolutely evil it is to save money, invest it and expect a fair return."

That's actually exactly the point of inflation.

If it weren't for inflation there would be zero impetus for you to invest your productivity surplus, you would simply stockpile it. Even when you are 'saving' money you are really investing it in a bank or some other institution so that it can be invested on your behalf.

We need to spur investment in productivity enhancements, and increased spending is by and large the most efficient way to go about that. Hopefully with all this investment we'll hit a homerun. Like the transistor or a/c power or the spinning jenny. Something that boosts productivity exponentially.

Anonymous said...

Eiseley,

Nobody should be forced to spend what they do not want to. That's how we got into this mess. Inflation is theft. If not, let's legalize all counterfeiting, not just the government's?

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