Posted on 10/19/2022 10:07:31 AM PDT by JV3MRC
A Johns Hopkins University economist wasn’t having any of has-been comedian Jon Stewart’s gaslighting over the true source of America’s inflation crisis: a drastically inflated money supply.
Economist Steve Hanke joined the Oct. 19 edition of Apple TV’s The Problem with Jon Stewart and didn’t mince words. “Inflation is always and everywhere caused by one thing: too much money. Period,” Hanke said. “That’s the end of the story. It is simpler than you think.” Stewart immediately tried to retort with pseudo-economic reasoning: “I’ve read studies that contradict that, but I don’t know.” Hanke didn’t waste time rebutting: “Whatever you’re reading is rubbish.”
(Excerpt) Read more at newsbusters.org ...
Because there is a delay that Milton Friedman speaks about whereas the good effects of Inflation are felt first and then the bad effects are felt later. He likens it to drinking alcohol to excess. You feel great, can do anything and then the booze catches up to you and you fell awful and there is no quick fix.
If I believe the $100 in my pocket will be worth $110 tomorrow I will be less likely to spend it on $100 of goods or services today because I will be able to get that same good or service for less and the contrary is true. In the first example velocity will be much less than the second but these are effects and not causes.
Bttt.
5.56mm
I totally agree. The public perception creates the velocity or lack thereof. And the velocity creates the inflation. But without massive currency printing behind it, velocity-created inflation would be short-lived and would quickly stabilize. Currency printing is the fuel. Velocity is the catalyst or spark that ignites it. The whole system is a confidence game.
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No, the bottom line is most definitely that monetary inflation has the same cause.
You raise a good question, however. The reason the rest of the world is also experiencing inflation is due to the fact that the US government “exports” it -this is because US dollar is the de facto world reserve currency. There is a huge demand for dollars, that circulate entirely outside the US.
This fact was commented upon many times in the past - De Gaulle calling it an “exorbitant privilege”, and some Treasury Secretary or another said something to the effect “It may be our dollar, but it’s your problem.”
The error is also conflating higher prices due to monetary inflation and higher prices due to supply and demand, or war jitters. While the “consumer” may not appreciate the difference, all she sees is skyrocketing digits on everything she buys, there is no relationship per se.
Supply and demand can cause prices to go higher - but they can also cause prices to go lower. Not so with monetary inflation.
Note well politicians want to confuse people, and act like spectators. “News” articles discuss it as if it is something mysterious that just falls out of the sky. “Expert” economist quacks tell us that 2% inflation is good for the economy, blah blah blah.
“If the US money supply is the cause of inflation, why is there inflation in the rest of the world as well?”
Because foreign central banks have been slower than the Fed at raising their own rates to combat inflation.
You appear to equate price rises caused by lack of supply with price rises caused by increases in the money supply. They feel the same to consumers but only one is due to inflating the money supply.
Good economists are rarely in doubt.
It’s basic to the Monetarism school of Milton Friedman and Anna Schwartz. The theory that the quantity of money is the main factor determining the long run price level.
In the short run policies like the Carter and the Biden War on Oil can drive prices through the roof but those prices will fall once you toss out the control freaks who are causing the problem.
Has he even taken ECON 101???
It explains SO MUCH.
That is one of the single most useful courses I had to take in college.
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