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To: JasonC
To understand the unsoundness of Mises' detailed arguments requires a pretty detailed understanding of Austrian economics and also of the real economic issues involved, beyond even what those economists themselves were aware of. It requires a full knowledge of modern economics, pretty much.

I am all ears for the instruction you are probably unqualified to give us on the grounds that you don't even understand that expanding the money supply (beyond what is need for expanded economic activity) is inflationary. You are the only person here who does not understand that point.

Now, I am happy to have a refutation of the point in all its mathematical glory, if you wish. Please furnish it. THAT will not snow me.

235 posted on 03/13/2008 12:18:07 PM PDT by AndyJackson
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To: AndyJackson
Expanding the money supply is necessary even to keep the price level constant. If the money supply were constant, the average price level would fall continually. Every real economist knows this, including von Mises.

If the money supply expands fast enough, then the price level will rise. How fast it has to expand for the price level to rise at this or that rate, is not a matter that can be known beforehand. You have to try it and see, it changes regularly with all shifts in the nature of the economy etc.

And even the average price level rising, still does not pick your pocket, or it goes without saying, break your leg. You have no prior right to the level of prices measured in dollars remaining unchanged forever.

You are also not forced to hold dollars, net (e.g. you can carry real property with nominal debt), so such changes need not harm you in any way. You are responsible for your net exposure to changes in the value of dollars, just as you are responsible for betting on the value of gold or stocks or real estate, or not.

240 posted on 03/13/2008 12:28:26 PM PDT by JasonC
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