What the world needs now is inflation

  • Article by: THE ECONOMIST
  • Updated: November 7, 2013 - 1:51 PM

Inflation can be a problem. But it's not today's problem. And anyway, deflation is worse.

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davehougNov. 7, 13 4:25 PM

Just ask Goldilocks how much inflation we should have :)

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hookshotNov. 7, 13 5:23 PM

Bingo. A conservative publication finally gets it. They're finally admitting that deficits are not the problem after all. When deflation is your enemy, you need government to spend without fear. The last time we faced deflation was the great depression, and it took a massive government spending program called ww2 to get us out. In absence of war, we need more government spending. You then pay down your debt in good times.

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ti1310Nov. 7, 13 6:32 PM

----Bingo. A conservative publication finally gets it. They're finally admitting that deficits are not the problem after all. When deflation is your enemy, you need government to spend without fear. The last time we faced deflation was the great depression, and it took a massive government spending program called ww2 to get us out. In absence of war, we need more government spending. You then pay down your debt in good times.---typical clueless liberal post, this has nothing to do with the deficit or government spending. Read the article again, this has everything to do with the money supply and the Federal Reserve. Control of inflation occurs through the money supply not government spending.

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cyberhaze9Nov. 8, 13 7:15 AM

Maybe the question we should be asking is, why isn't there significant inflation now? The Fed has printed over $8 trillion in new money it has offered at near zero interest rates and dumped into the economy (at least to the connected institutions it lends to). The answer is complicated, but a big component is that little of this money is circulated through the economy and has simply fed the record profits of banks and major corporations who have not used their record reserves to provide affordable loans, increase wages, or create jobs, exposing the "tickle-down", "soak the job creators" myth for what it is, a myth. With wages depressed, high unemployment, and millions still trapped in high interest loans on underwater properties, there is little pressure to raise prices while mega-corporations and the investor class continues to hoard all of this unprecedented windfall.

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vlombardyNov. 8, 13 7:44 AM

This doesn't mention the LIBOR price fixing scandal, and the even greater ISDAfix price fixing, both controlled by a few of the largest banks in the world. 4 banks in the US own over 90% of outstanding derivatives contracts, currently worth hundreds of trillions of dollars. Over 80% are interest rate related, and all depend on LIBOR and ISDAfix prices; and all are therefore manipulated illegally by the same few banks. It's all going to come crashing down as interest rates rise, making 1929 look like a picnic.

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twspt7Nov. 8, 1310:28 AM

Rising inflation without rising wages will further swamp the American middle class. This may come as bad news to some, but the goose cannot continue to lay golden eggs if one does not feed it. And in an economy primarily driven by consumption, another name for the goose is the middle class.

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kleindropperNov. 8, 1311:27 AM

Just ask Venezuelans how great their 52% inflation rate is! Did I mention they can't even get toilet paper down there? See your future America, Venezuela is a socialist paradise. Ask yourself whether you'd like to keep onepercenter items like food and toilet paper.

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Don9539Nov. 8, 1312:22 PM

Seems counter-intuitive to me. Inflation is good for the debtors, but for those of us who have saved some money would it not devalue our nest egg we worked so hard to build?

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rlwr51Nov. 9, 1312:05 AM

Inflation is what the rich use to keep the lower class in their place - on the bottom, struggling so they don't have time to pay attention.

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potter101Nov. 9, 1312:21 AM

i1310Nov. 7, 13 6:32 PM ----Bingo. A conservative publication finally gets it. They're finally admitting that deficits are not the problem after all. When deflation is your enemy, you need government to spend without fear. The last time we faced deflation was the great depression, and it took a massive government spending program called ww2 to get us out. In absence of war, we need more government spending. You then pay down your debt in good times.---typical clueless liberal post, this has nothing to do with the deficit or government spending. Read the article again, this has everything to do with the money supply and the Federal Reserve. Control of inflation occurs through the money supply not government spending.****************************You print money to keep the interest rates down ,it only has a possibility of causing inflation and that is the same for Government spending. You can obviously print massive amounts of money and have government ultra spending and still not get inflation. Proven by what has happened in our economy for many years. It's my opinion though that we should do absolutely nothing to increase inflation like this article suggest, I mean Why would we, historic parallels probably not influenced by anything he suggest.

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