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Monday, June 29, 2009

Inflation vs. Reflation

When I watch the comedians on the Communism Channel, they like to talk about efforts by the Federal Reserve to "reflate the economy".

A pro-State troll says "New money must be printed to replace money that was destroyed during the recession!" The reality is that a massive amount of new money has been printed. Look at objective inflation measures like M2, reconstructed M3, or the price of gold. By those measures, the rate of inflation is high.

The new money is used to bail out the banksters and insiders. They are profiting at the expense of everyone else. Printing and spending brand new money is a very valuable perk.

By saying "reflation" instead of "inflation", the comedians are spreading an evil fnord. When they say "We're merely replacing money that was destroyed!", then it sounds like they're doing something heroic. The reality is that, by any objective inflation measure, there is massive inflation.

2 comments:

fritz said...

If we keep it up we should see hyper inflation soon. Just like during W.W. 1 Germany in 1918. When it took 1 full wheel barrel of worthless German marks to buy a loaf of bread!!

fritz said...

I just did the research. The maximum exchange rate was 4.2 trillion marks for every 1 American Dollar in December 1923. This happened because the Germans just printed money to pay off their insurmountable war debt. People found it more affordable to burn stacks of worthless marks for heating and cooking than buy wood.

Could this happen to us???

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