tag:blogger.com,1999:blog-11906042.post5169632748741667418..comments2024-03-29T10:51:27.752+13:00Comments on Not PC: GUEST POST: What is inflation—and why Matt Nolan should care. [Updated]Peter Cresswellhttp://www.blogger.com/profile/10699845031503699181noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-11906042.post-31486292646782024712011-04-12T00:37:17.718+12:002011-04-12T00:37:17.718+12:00Why not ask Matt why he didnt mention money supply...Why not ask Matt why he didnt mention money supply?<br /><br />You can ask him why money supply didnt come under the heading "economic fundamental"?<br /><br />I would guess it means supply and demand of all goods.Kimblenoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-23686086422695450932011-04-10T14:47:27.739+12:002011-04-10T14:47:27.739+12:00Actually I think it's easier to explain to peo...Actually I think it's easier to explain to people that way.<br /><br />If you double the amount of money with no corresponding increase in goods and services what are you going to see.<br /><br />Inflation. People do understand this.Marknoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-39400555102037639982011-04-08T17:22:00.418+12:002011-04-08T17:22:00.418+12:00Mises captured this semantic confusion beautifully...Mises captured this semantic confusion beautifully in the below quote. I ensure that all my students have read and understand this:<br /><br />"Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term "inflation" to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation. It follows that nobody cares about inflation in the traditional sense of the term. As you cannot talk about something that has no name, you cannot fight it. Those who pretend to fight inflation are in fact only fighting what is the inevitable consequence of inflation, rising prices. Their ventures are doomed to failure because they do not attack the root of the evil. They try to keep prices low while firmly committed to a policy of increasing the quantity of money that must necessarily make them soar. As long as this technological confusion is not entirely wiped out, there cannot be any question of stopping inflation."Juliannoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-23183761197505727372011-04-08T16:12:02.317+12:002011-04-08T16:12:02.317+12:00Here is a must read, I think it joins a lot of dot...Here is a must read, I think it joins a lot of dots (IMO) on the subject!<br /><br />http://www.ritholtz.com/blog/2011/04/must-read-apropos-of-everything/Vnoreply@blogger.com