<I can easily envision soaring INFLATION in many goods and services even as the economy tanks>
In the modern way of looking at things, when the price of something you own goes up, that's not "inflation". When the price of something you don't own but have to buy goes up, that IS "inflation". In reality, the prices of an entire group of economic assets, whether paper financial assets or real economic goods and services, can only go up if there is a preceding increase in the amount of the medium of exchange, the money. There is only this difference. The "supply" of paper assets can be inflated with the stroke of a pen, just as the money was. But the supply of real physical existing wealth cannot. It must be found, extracted, and transformed into something useful. Then the real goods must be designed, constructed, packaged, advertised, transported and physically transferred from buyer to seller.
The world is, very late in the day, coming to the realization that while wealth does, in part, grow on trees, money doesn't, and therefore isn't wealth. Having come to that conclusion, they are beginning to convert the money into wealth, real wealth, just as they did in the 1970s, the dawn of the age of fiat currencies. That is what the next US President has to face. It won't be a pretty sight.
|
