“The most overvalued equity market in history”
Tag Archives: deflation
“Digging into U.S. growth economics and when the Fed could realistically hike rates, with Steve Ricchiuto, Mizuho Securities.”
Source: CNBC: No hike till mid-2016: Pro (February 10th, 2015)
Krugman, the anti-monetarist, shows how little he cares for the store of value function of money in the following quote, taken from his blog post (Golden Cyberfetters, Sep 7, 2011) over at the New York Times.
What we want from a monetary system isn’t to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich.
What Krugman, and those in control of the money supply want, is to make people holding money poor. He and other Keynesians have provided the academic veneer beneath which politicians seek to create profitable asset bubbles for themselves, erode private wealth through persistent inflation, and engage in rent-seeking among industries and organized labor by allocating the initial, asymmetric gains from inflation.
A recent article in Slate (Deflation Nation, July 3rd, 2010) attempted to describe the “positive” and “negative” affects of inflation and deflation. It argued that “there’s good deflation and bad deflation”.
Making a value judgment about deflation depends in part on which side of the balance sheet you sit and on what’s going on in the broader economy.
From this statement, one can argue that a government in debt will be predisposed toward inflation. There are problems with the Slate article (“consensus”, ie non-monetary definitions of inflation/deflation; complete misuse of “stagflation”), but at least it’s honest about inflation favoring the borrower.