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    rick perry is a red..., 2011-08-17 12:59:39 | Main | awaken mustakrakish, the lake troll, awaken, awaken, awaken..., 2011-08-18 15:41:31

    inflation:

    One of the causes of inflation, any textbook will tell you, is a general decrease in supply. Idle, unproductive resources, say 15 million of them, and historically low capacity utilization, will generate inflation no different, all things being equal, than printing too much money to put them back to work.

    I've never witnessed an inflation hawk, or anybody else for that matter, complain about the inflationary force generated by shortfalls in production.

    We could also talk about the CFMA and the Fed's printing money to re-inflate asset prices pushing rich people's money into rolling speculative long positions in commodities markets and pushing up the consumer price index, but even if the financial sector wasn't the pit of unmitigated fraud that it is, you'd expect a little inflation from all this idle capacity after national income has (mostly) recovered: somebody is making money again, but that money is self-evidently chasing fewer goods and services than it could be.


:: posted by buermann @ 2011-08-18 09:42:29 CST | link





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