Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The only way to solve inflation is through deflation, or shrinking the money supply. The problem is this: the modern debt based, fiat monetary system cannot function in a deflationary environment.
Isn't some of this inflation stuff also a supply/demand thing? If people stopped buying so much of a certain thing the prices would come down. At least that's how it works with housing, rent, hotel stays.
Isn't some of this inflation stuff also a supply/demand thing? If people stopped buying so much of a certain thing the prices would come down. At least that's how it works with housing, rent, hotel stays.
Inflation is always and everywhere, a monetary phenomenon.
I’m just not convinced of the certainty expressed that raising interest rates will bring down inflation.
Or at least the 2 percent goal. Any thoughts?
It won't work. The reason it won't work is because interest rates only effect Monetary Inflation and you don't have that.
When the Korean War started in June 1950, rationing had just ended in October 1949.
Households, business, and industry went into a total panic and started hoarding everything because they though rationing would start again.
Grocery stores had no flour, sugar, salt, butter and other things because housewives were buying and hoarding it as a hedge against rationing. Business and industry were buying and hoarding metals, minerals, gasoline, diesel, petroleum lubricants, rubber and other items because they feared rationing.
That caused prices to rise and Demand-pull Inflation --not Monetary Inflation -- reached 10+%. The Federal Reserve increased interest rates causing the 1951-52 Recession and Demand-pull Inflation continued on at 10+% until everyone realized there wasn't gonna be any rationing.
All the cowardly Truwoman had to do was get on radio and TV and say, hey, folks, we're not gonna ration anything or we're only rationing these limited number of things and that would have been the end of it and no need to raise interest rates and the 1951-52 Recession would not have happened.
Raising interest rates is not going to change the Supply of gasoline or diesel, or food prices or anything else, and it will not change the Demand for those things, either, so Demand-pull Inflation and the resulting Cost-push Inflation caused by Demand-pull Inflation will continue until Supply & Demand issues are resolved.
It's patently true and you're the one that is completely ignorant. Whether the monarchy is still in power in 50 years or gone in 10 is completely at our whim.
LOL. Excellent rebuttal!
What's next? "I know you are, but what am I?"
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
