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To: randita

This is nonsense. There are other ways to trigger inflation other than labor cost. For example, printing TONS of money reduces the value of each dollar therefore requiring more dollars per item.


7 posted on 01/12/2009 10:28:25 AM PST by Hacklehead (Liberalism is the art of taking what works, breaking it, and then blaming conservatives.)
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To: Hacklehead

“For example, printing TONS of money reduces the value of each dollar therefore requiring more dollars per item.”

It depends on what happens to the money after the federal reserve or other central bank prints it. The Bank of Japan started printing money by the boatload in 2001 to combat their deflation, but it had very little effect because the Japanese commercial banks were unwilling to lend the money and it just piled up in their reserve accounts and didn’t enter the Japanese economy. Several years later, Japan is easing back into deflation again.

You can print all the money you want, but if just piles up in a vault somewhere and doesn’t enter the economy then it has little effect.


12 posted on 01/12/2009 10:36:56 AM PST by MittFan08
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