Why is there no inflation?

Discussion in 'Economics' started by bonds, May 8, 2013.

  1. bonds


    Money printing everywhere... 85 billion every month here, Europe and Japan printing like crazy...

    yet prices seem to be coming in a bit in the supermarket, commodities coming in, gas coming in, gold coming down hard...


    At what point is all this money printing gonna start to cause inflation here?
  2. vicirek


    Money printing is inflation. Prices are not measure of inflation.

    Once people notice that there is inflation through interest rates or prices the excess of money is being taken out of the system through higher prices of goods and credit cost which is post inflationary effect.
  3. 1) Never.....or only after all of the existing debt is repudiated. :eek:
    2) There's too much worthless debt that keeps "deflating" which offsets the appearance of "inflation" from all of the various "Q.E." programs. :D :p :cool: :) :( :mad:
  4. Common wisdom aside, vicirek is technically correct; simply incresing the money supply inflates regardless of how prices react in the short term to that inflation. Keep in mind that while consumer prices have risen only modestly there has been significant asset inflation -- gold, et al.

    If the question is why are prices not rising in response to the inflation we are experiencing it is pretty simple: We are in the grip of a vicious depression and the money being thrown at the system is not enough to cause prices to rise in that environment. That may change but it has not yet done so.

    We have spent many decades living beyond all reason and short term fixes seem to be fixing things for shorter and shorter periods. A case could be made that the current low rates and excess liquidity simply will not get us through even in the short term. It's tempting to say time will tell but it is also quite possible that time is up.

  5. There is inflation but it is not acknowledged by the government. Biflation in that somethings are going up and some are going down.
  6. Because.
  7. bonds


    by definition : " inflation is a rise in the general level of prices of goods and services in an economy over a period of time"
  8. and according to modern monetary theory, "we can create as much money as we need, the only constraint being inflation."
  9. vicirek


    There are all kind of definitions, statistics and official measures of inflation with one goal in mind: Keep everybody confused for as long as possible.

    Inflation is stealing from savers and paying for liabilities with money of lesser value. Concept of inflation is brutally simple and this simple monetary trick was repeated for centuries and always with the same result. I guess that by now (21st century) it should be settled what is what is not inflation.
  10. Those that favor doublespeak have a vested interest in not sticking with the real definition of inflation. Price increases are a consequence of inflation yet the actual inflation is the increase in money supply. They only want you to notice it as it gets too late. Note my language was sloppy in my first post and I have edited it to more accurately reflect my views. Not trying to put anything over on anyone ... lol. The first sentence below desribes inflation the rest is simply nonsense!

    The term "inflation" originally referred to increases in the amount of money in circulation, and some economists still use the word in this way. However, most economists today use the term "inflation" to refer to a rise in the price level. An increase in the money supply may be called monetary inflation, to distinguish it from rising prices, which may also for clarity be called 'price inflation'.[30] Economists generally agree that in the long run, inflation is caused by increases in the money supply.[31]

    #10     May 8, 2013