Sunday, May 18, 2008
CPI is Orwellian Newspeak
Mises: What you should know about inflation
I just found the whole book online! Wikepidea ROCKS!!
From: http://en.wikipedia.org/wiki/Henry_Hazlitt Anybody who wants to understand houseprice inflation, oil inflation, any inflation, MUST read this genius.
Posted by planning4acrash @ 09:36 AM (1281 views) Add Comment
17 Comments
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1. hpwatcher said...
An interesting read, thanks for posting.
2. scandinavian pessimist said...
Brillliant! It should be compulsary for every HPC blogger to read this.I think it should go on our front page.
3. icarus said...
planning4 - if you haven't already done so you may want to read Hayek's "Denationalisation of Money". You can download it at
iea.org.uk/files/upld-book431pdf?.pdf
4. Boynamedsue said...
Sigh. Mises was a muppet.
5. planning4acrash said...
Thanks guys. I got the mises audio excerpts of this book posted in the front page section on academic papers, but only found the full book online this morning. I'll post this book to the webmaster, who should swap this for the text excerpts. They decided, probably rightly, that it was a bit heavy for the front page, which benefits more from the comedy sketches!
6. planning4acrash said...
Icarus, your link is broken without a www. before because it is a .co.uk
Here is the full link:
www.iea.org.uk/files/upld-book431pdf?.pdf
7. planning4acrash said...
That will be an interesting read, tho I do feel that its thesis is our current situation, money production is now privatised, through the federal reserve and the BOE. Yet links with government remain and they print money indirectly for their own purposes, whilst money issuers, through speculation, gain a vested interest in printing money. I maintain that a gold standard is the only way to avoid inflation, but will give your book a go if I get time.
8. Dbc Reed said...
L. von Mises a genius? Are you kidding? The gold standard the answer to inflation? Of course you won't get inflation if you cut off the money supply.You won't get any economic activity at all.This is now the problem for housepricecrash: we want house prices to come down but the price is too high if the whole economy crashes.We need cheap credit: we just don't want it going into house prices.Answer :block it with a tax, either the old schedule A of Income tax abolished by the Tories in the 60's or the even older Land Value Tax . Its that simple.(My money's on LVT)
The creation of money by the banks is a problem, but the present compromised system can and has to be made to work.
9. icarus said...
planning4 - Hayek is simply against governments and central banks issuing money on a monopolistic basis and then printing themselves out of trouble (and/or consolidating big government). He argues that inflation is inevitable under these circumstances and this means not only a rise in the general level of prices but also, crucially, in the relative levels. The distorted price structure misdirects the use of resources into areas which are profitable only as long as inflation accelerates (e.g house price bubble). He argues that competing privately issued monies can solve the problem of price stability. Worth a read..
10. plato said...
I have to say that I have been confused on many occasions by comments on Inflation and often thought that my original information was not accurate. However the basics are simple and I think confusion is probably stoked.
I always understood Inflation to be the over-supply of paper money. This is why in one of my comments regarding the bailing out by Central Banks, I simply put "Hyperinflation'.
As goods or commodites maintain their price,rise or even fall,they effectively cost more because the money we now have through over-supply is worth less or in some cases worthless.
So it's refreshing to read the correct concept again after so many years.
Perhaps more to the point is: This should be compulsory reading for journalists as generally most people are educated by them.
11. icarus said...
The dominance of one currency - the US Dollar - enables the Fed / US govt to pursue a "don't worry about deficits or dollar devaluation", i.e. an inflationary, policy. As long as the dollar is the universal reference and the US is a major importer other countries will support the dollar artificially, especially given their dollar holdings. So the discipline which forces other countries to worry about their currencies' value is less in evidence in the US. And of course when the US printed itself out of the dot.com troubles this led to other countries' loosening their monetary policies. So the dominance of the dollar may be a significant source of inflation.
12. planning4acrash said...
The dollar is also our greatest hope. Fiat money is unconstitutional. The American constitution REQUIRES a gold standard. Could we see a legal challenge to the fed from the libertarians? Law and power coming into balance to produce ethics?
13. icarus said...
planning4 - but that battle has been going on in the US for over 200 years.
14. amjidk said...
some very interesting points, especialy regarding the stubborn falicy that "inflation is caused by a shortage of goods", this is somewhat similar to the argument we get time and time again that house inflation is due to lack of supply, it isn't, it's to due to easy availabilty of credit..
This definitely should be a must read for journalists..
15. planning4acrash said...
Substitute goods for houses, and the mantra's of shortages, polish immigrants, sound fundamentals, blah de blah, and you get a debunk of vested interest trash in the newspapers and the chancellor's hole.
16. d'oh said...
Dbc Reed - A gold standard does not cut money supply - credit can and always does exist. Basing a monetary system on fiat just opens up a number of possible forms of abuse. The real problem is how to control credit and keep it under control. What I don't seem to understand is why people think we cannot have a working economy unless we have a fiat system...it's not as if economies haven't functioned in gold or silver back systems is it?
17. planning4acrash said...
d'ogold held in vaults. I refer to a 100% gold standard, where each pound or dollar is redeemable in gold. The most recent gold standard in the USA was a fractional reserve and, yes, it was inflationary.
By the way Icarus. I am aware that the battle has being going on since the beginning of the industrial revolution! A change now would co-inside with S2Rents ideas. Fingers crossed. This would see law come into balance with power to produce ethics. We may see a resurgence of things like the American Constitution. Made possible by free information on the internet.