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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: GST who wrote (75504)	12/13/2006 10:58:54 AM
From: GST	Respond to of 110194

deleted

To: GST who wrote (75504)	12/13/2006 1:02:14 PM
From: Horgad	Read Replies (1) \| Respond to of 110194

Mish may or may not be wrong about his deflation predictions, but I don't think it will have anything to do with how he defines inflation. As for myself, the only factors that I see driving inflation are monetary policy and past monetary policy. The complexity of the local and global economies just add noise to the picture making it difficult or impossible to predict when, where, and how the inflation will show up in a way that it will be recognized. In my opinion when the money is printed, the inflation is put into the system. It is there whether we can see it or not and it is there whether Joe Sixpack is currently feeling it or not. Thinking otherwise is leading some people to think that we can continue to print money willy-nilly with no adverse consequences as long as the global economy continues to "absorb it" and as long as prices in the US remain affordable. I don't think that you feel that way...but by not calling printing money, "inflation" and rather saying it is one of many possible causes of inflation, too many doors and loopholes are being left open. Doors and loopholes that politicians are happily going to exploit as they use every possible excuse to spend more and more money that they don't have. And all the while they will be happily waving papers filled with prices of things and saying look no inflation! IMHO

To: GST who wrote (75504)	12/13/2006 3:11:15 PM
From: benwood	Read Replies (3) \| Respond to of 110194

I'm amazed at how some of the posters on this forum keep harping on each other's definition of inflation. The Austrian definition of inflation, as I understand it, is a monetary phenomenon. There are a variety of consequences, including what Mish calls "price" or "retail" inflation, but that isn't the only consequence. Other economists, and especially common usage, used the word inflation to mean prices going up. By adhering to the monetary phenomenon definition, Mish hardly denies the phenomenon where prices go up -- he just doesn't call that "inflation" by itself. Even if monetary and retail inflation had no words at all, just grunts, one could still accept the reality and consequences, yet there would be no simple way to talk about them. But you still could: "That thing where more and more money keeps showing up via credit expansion" or "you know, when prices keep going up and up, whatever that is called..." etc. Truly, it would be so simply of people on this forum just said either "monetary inflation" or "retail inflation" (or price inflation) to denote which phenomena they were talking about. The point of the discussion should be about the economic effects, not hair splitting the definitions. To me, this endless debate over the proper definition is just chest beating. As Daniel Webster found out years ago when he wrote his comprehensive dictionary -- the book doesn't define the language, but rather, popular usage defines the language. But popular usage on that word is mixed. I swear, there have been at least 500 posts on this forum arguing about what the singular word "inflation" means. Isn't that a freakin' waste of time? Isn't it more relevant to have your thoughts understood unambiguously rather than to be "right?" I know it really is extremely important for some individuals to be right, but frankly, after a year or two of that, it's starting to sound amazingly silly. Do you guys want to fight it out in a boxing ring? Swing from ropes and race across a crocodile infested swamp? If you look at my posts for the past year or two, I always say "retail inflation" when I'm referring to prices. I don't give a hoot about being right or wrong about my pet definition, or what others say. I just want people to know what I'm talking about. All one has to do is take one's ego out of the equation and it's really easy. That's the last I'm going to say about this silly argument, unless it is still raging in December of 2007, and then I'm going to repost this entire rant! Grrr!!! <g>