Monday, July 13, 2009

Unemployment

Mass Deflation or Inflation

This article is a very interesting take on events in the US from an inflationist point of view. Also, I was remembering the other day about the arguments against having a policy of full national employment, basically because of inflationary problems. Whether by accident or design, rising unemployment in the UK is an extremely useful block against inflationary pressures, whether this is a policy or not, "we had to burn the village to save it" type thinking. Worth a read anyway, because the situation is broadly similar in the UK. The conclusion drawn is mass inflation when the government cannot extend state ownership (nationalised banks, car companies etc) further, and the banks have no other choice but to restart lending.

Posted by stillthinking @ 01:23 PM (1040 views)
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2 thoughts on “Unemployment

  • yes, very amusing TC… but who thought that it would ?

    hyperinflation is caused by a loss of confidence in the currency, no more no less.

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  • Like the article although it ends oddly, asking for the defaltionists argument and giving it

    “Anyone who predicts an inevitable price deflation does not understand that the present scenario is the product of legitimately terrified bankers and the Federal Reserve’s Board of Governors. At any time, the FED can get all of the banks’ money lent. But the FED knows that this will double the money supply within weeks. This will create mass price inflation”

    It is not that any goverment cannot create inflation, of course they can, it is whether they will ever be reckless enough to choose hyper inflation over deflation. Perhaps they will.

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