Posted on 11/23/2014 6:55:14 PM PST by Tolerance Sucks Rocks
(Reuters) - European Central Bank President Mario Draghi has moved closer to launching sovereign debt purchases and data this week will show just how dangerously low inflation has fallen in the $13 trillion euro zone economy.
A sickly Europe has held back global economic growth for years, and now it is contributing significantly to powerful forces already dragging down inflation across the globe.
A spectacular drop in crude oil prices over the past month will be the center of discussion when ministers from the world's top oil exporters meets in Vienna on Friday.
(Excerpt) Read more at reuters.com ...
PING!
What if no one wanted to take on debt?
If it was just "The Theory of Supply and Demand" then maybe we could so something about changing it.
“dangerously low inflation”
What WOULD we do if the money we have in our pocket wasn’t worth less next year.
Take a look at Japan to see how that works. They’re on something like Year 25 of their “Lost Decade,” aren’t they?
Inflation between 1800 and 1912 was -40%. Since the Federal Reserve was founded the dollar has been inflated 2600%.
The concern is the natijnal debts. If money is worth more, debts become a greater proportion of the budgets. It makes it harder to pay down debt.
To make matters worse, violent crime is also down.
Stability seems to be worth something. I’d go for a target of 1% deflation/annum.
Maybe we can get Obama to sign an EO repealing the Law of Supply and Demand.
Japan has demographic problems too. Also not much physical natural resources. Perhaps too much gov’t control. But no immigration issues.....
So inflation is good? Just so we know what inflation is, let us define it.
First, what it is not. Inflation is not an increase in the price of goods and services.
Secondly, the correct definition of inflation is the following. Inflation is an increase in the money supply, period. An increase in the money supply by private central banks printing fiat currency such as dollars, euros, etc. An increase in the money supply causes prices to rise because of more money chasing fewer goods. When there is no increase in productivity, prices rise due to scarcity as more money is chasing fewer goods. Just look at Venezuela.
So now they are telling us there is no inflation and that is bad. But when there is inflation, that is also bad. They can have it both ways? Sure, that is what the banks and governments want.
Let us look at oil; the price has dropped because of increased production. The same amount of money is chasing more goods so prices drop. So ladies and gentlemen, there you have it, the real definition of inflation. Supply and demand, Adam Smith had it right.
I’d go for 0 percent inflation myself. A dollar in 10 years would be worth what a dollar is right now.
“So now they are telling us there is no inflation and that is bad. But when there is inflation, that is also bad. They can have it both ways? Sure, that is what the banks and governments want.”
The great danger the world faces now is deflation. When it comes, governments and people will pray for inflation.
The demographic problem is exactly what has put Japan where it is. That what drives a deflationary trend.
There are an increasing number of stories of gold being hoarded.
Maybe the fiat currency is being used to purchase even more worthless pieces of paper that we often refer to as stock certificates.
But when those stock certificates are shown to be about as valuable as tulip bulbs...
Zer0 is a good target, but they always fail on the + side. It multiplies up after a while.....
A spectacular drop in crude oil prices over the past month will be the center of discussion when ministers from the world’s top oil exporters meets in Vienna on Friday.
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how stupid are these guys. falling oil prices are exactly what they do need.
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