May 16, 2020 | Inflation–Deflation

The government world of policymakers is confident that massive reflation by central bankers will restore the economy. Financial history says it may not work and the problem is that interventionist theories have not fully understood financial history. In the jargon of economics, perhaps the most misunderstood term is “inflation”. Indeed, it has been so chronically misunderstood that “they” must be paying people to deliberately not understand it. In one decade, such as the 1970s, when the cost of living was rising faster than take-home pay there was considerable social distress. Over the past 300 years there has been, in the senior economy, a number of such examples. Also, there have been periods when asset prices and wages deflate. Both trends have occurred whether the senior central bank was disciplined by a gold standard, or when allowed recklessness under a fiat currency.

Download (PDF, 230KB)

Bob Hoye May 16th, 2020

Posted In: Charts and Markets - Bob Hoye

Next: This Week in Money »