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Saturday, February 11, 2006

More on Currency, Part II

To pick up from where I left off, I'm not saying that there should be either of these "options" at all.

What I'm saying is that even if the "unthinkable disaster" of deflation actually did what they say it will (which it won't, because money isn't wealth) it would hardly constitute a disaster for most of us.

What the "economists" actually claim, once you get through the bs, is that by shortening people's time horizons, you are compelling them to accellerate production. And this is true, in so far as it goes, but that's not really a good thing. It's a keynesian/bureaucommie way of looking at the economy, like there's some "production machine" that just churns things out willy nilly and you're turning up the accellerator on it.
But the only reason to produce something is because someone wants it. Otherwise you're just wasting capital and land that would otherwise be used to make things people do want.

Sooner or later prices get all distorted because you've got a surplus of all this crap that no one wants and not enough of what people do want, in a nutshell. This is a simplification, but not an erroneous one. It's basically like that.

But even this claim is not the real reason why economists get paid to promote inflation. Yes the accelleration factor means something to the ruling class, but it's who gets that newly printed money that is really important to them.
They want the price structure to be distorted in just the right way. Which is why they hire these "economists" to figure this stuff out.

I mentioned time horizons before, and I'll get more into that in the next post in this series. It's an important, maybe the most important, semi-obscured factor in the Inflation Game.


Blogger FSK said...

Read about "The Compound Interest Paradox" on my blog and you'll understand better why the current monetary system is totally unfair.


2:15 PM  

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