Comments on: M3 Money Supply Chart, Inflation, Fiat Currency http://www.rapidtrends.com/2008/04/12/m3-money-supply-chart-through-april-11th/ Lets talk about why Fiat Currency and Inflation is Bad Juju Sat, 13 Mar 2010 17:15:22 -0500 http://wordpress.org/?v=2.8.6 hourly 1 By: Alex Stanczyk http://www.rapidtrends.com/2008/04/12/m3-money-supply-chart-through-april-11th/comment-page-1/#comment-3671 Alex Stanczyk Fri, 19 Feb 2010 11:49:05 +0000 http://www.rapidtrends.com/blog/2008/04/12/m3-money-supply-chart-through-april-11th/#comment-3671 reality, thanks for commenting. At this point I think we have to agree to disagree. Your viewpoint and definition of inflation comes from Keynesian economic theory, but there are many Doctorates in Economics who disagree with this theory. For the alternate viewpoint, you can take a look at Austrian economic theory (same school of thought that Ron Paul subscribes to). A great resource for this is the Ludwig Von Mises Institute ( www.mises.org ) Simply put, yes, if your supply side costs go up, your prices will go up. Austrians do not define inflation as prices going up however, Austrians define prices going up, as...well...prices going up. Money creation, that is inflation. The key is in having a "stable measure of value". If all values float (such as value of currency, and then value of goods, or supply inputs as you call them), then there is no stable method of truly measuring anything, and anything quantifiable must start with accurate measurement. This isnt a new concept. In the Bible, there is a proverb which states that "Unjust weights and measures are an abomination unto the Lord". This thought is a few thousand years old at this point. In other words, the currency unit must be a "just weight and measure" - in other words, it doesnt change. The USD on the other hand, has been proven to have lost over 96% of its buying power since the inception of the Federal Reserve system in 1913. That isnt exactly what I would call a "just weight and measure", because its value (its buying power) is obviously not stable. If a carpenter tried to build a house and the slide rule he pulled out to make measurements as he was building changed the actual size of the inch every time he pulled it out, how stable would that house be? Obviously it would be a catastrophe waiting to happen. And then people wonder why the US Economy is so unstable right now...maybe it has something to do with a broken currency unit of measure. reality, thanks for commenting.

At this point I think we have to agree to disagree.

Your viewpoint and definition of inflation comes from Keynesian economic theory, but there are many Doctorates in Economics who disagree with this theory.

For the alternate viewpoint, you can take a look at Austrian economic theory (same school of thought that Ron Paul subscribes to). A great resource for this is the Ludwig Von Mises Institute ( http://www.mises.org )

Simply put, yes, if your supply side costs go up, your prices will go up. Austrians do not define inflation as prices going up however, Austrians define prices going up, as…well…prices going up.

Money creation, that is inflation.

The key is in having a “stable measure of value”. If all values float (such as value of currency, and then value of goods, or supply inputs as you call them), then there is no stable method of truly measuring anything, and anything quantifiable must start with accurate measurement.

This isnt a new concept. In the Bible, there is a proverb which states that “Unjust weights and measures are an abomination unto the Lord”. This thought is a few thousand years old at this point.

In other words, the currency unit must be a “just weight and measure” – in other words, it doesnt change. The USD on the other hand, has been proven to have lost over 96% of its buying power since the inception of the Federal Reserve system in 1913. That isnt exactly what I would call a “just weight and measure”, because its value (its buying power) is obviously not stable.

If a carpenter tried to build a house and the slide rule he pulled out to make measurements as he was building changed the actual size of the inch every time he pulled it out, how stable would that house be?

Obviously it would be a catastrophe waiting to happen. And then people wonder why the US Economy is so unstable right now…maybe it has something to do with a broken currency unit of measure.

]]> By: reality http://www.rapidtrends.com/2008/04/12/m3-money-supply-chart-through-april-11th/comment-page-1/#comment-3666 reality Thu, 18 Feb 2010 19:35:31 +0000 http://www.rapidtrends.com/blog/2008/04/12/m3-money-supply-chart-through-april-11th/#comment-3666 to those who are simplifying inflation as solely linked to printing money, you are wrong. inflation is defined as an increase in the price of goods and services. so as supply side inputs increase, you will have inflation even if you don't print more money. as energy becomes more and more expensive we will see inflation, even if we don't print more money. that being said, printing money certainly is a huge, and controllable, contributor to those who are simplifying inflation as solely linked to printing money, you are wrong. inflation is defined as an increase in the price of goods and services. so as supply side inputs increase, you will have inflation even if you don’t print more money. as energy becomes more and more expensive we will see inflation, even if we don’t print more money.

that being said, printing money certainly is a huge, and controllable, contributor

]]> By: Jon http://www.rapidtrends.com/2008/04/12/m3-money-supply-chart-through-april-11th/comment-page-1/#comment-2942 Jon Thu, 29 Jan 2009 16:28:40 +0000 http://www.rapidtrends.com/blog/2008/04/12/m3-money-supply-chart-through-april-11th/#comment-2942 Great article. I also think that <a href="http://www.jonfleck.com/2009/01/28/the-government-is-getting-ready-to-raise-the-inflation-tax/" rel="nofollow">inflation is going rapidly increase as the Federal Reserve is forced to buy US treasuries in the coming years.</a> Although gold and silver are not the best long term investments, I believe that for the next couple of years they are going to rise rapidly. Great article. I also think that inflation is going rapidly increase as the Federal Reserve is forced to buy US treasuries in the coming years. Although gold and silver are not the best long term investments, I believe that for the next couple of years they are going to rise rapidly.

]]> By: US Government Bails out Walls Street, Who Bails out the US Government? | Your Financial Future, Gold and Silver Bullion, Inflation, Central Banks, M3 Chart, Fiat Currency, Dow / Gold Ratio, 2000 2008 2009 http://www.rapidtrends.com/2008/04/12/m3-money-supply-chart-through-april-11th/comment-page-1/#comment-2441 US Government Bails out Walls Street, Who Bails out the US Government? | Your Financial Future, Gold and Silver Bullion, Inflation, Central Banks, M3 Chart, Fiat Currency, Dow / Gold Ratio, 2000 2008 2009 Sat, 20 Sep 2008 17:18:22 +0000 http://www.rapidtrends.com/blog/2008/04/12/m3-money-supply-chart-through-april-11th/#comment-2441 [...] To understand why this is BAD, we have to understand why inflation is bad. [...] [...] To understand why this is BAD, we have to understand why inflation is bad. [...]

]]> By: OPEC Chief claims Oils rise is due to Dollars Devaluation | Your Financial Future http://www.rapidtrends.com/2008/04/12/m3-money-supply-chart-through-april-11th/comment-page-1/#comment-1060 OPEC Chief claims Oils rise is due to Dollars Devaluation | Your Financial Future Sat, 28 Jun 2008 16:24:22 +0000 http://www.rapidtrends.com/blog/2008/04/12/m3-money-supply-chart-through-april-11th/#comment-1060 [...] What Causes Inflation? [...] [...] What Causes Inflation? [...]

]]> By: Lets Spin Inflation Some More, Shall We? | Your Financial Future http://www.rapidtrends.com/2008/04/12/m3-money-supply-chart-through-april-11th/comment-page-1/#comment-1009 Lets Spin Inflation Some More, Shall We? | Your Financial Future Tue, 24 Jun 2008 20:51:16 +0000 http://www.rapidtrends.com/blog/2008/04/12/m3-money-supply-chart-through-april-11th/#comment-1009 [...] is caused by one thing, and one thing only! Adding more currency to the money supply! This is not rocket science! Oil prices are a symptom of the cause, not the cause [...] [...] is caused by one thing, and one thing only! Adding more currency to the money supply! This is not rocket science! Oil prices are a symptom of the cause, not the cause [...]

]]> By: The Global Inflationary Storm | Your Financial Future http://www.rapidtrends.com/2008/04/12/m3-money-supply-chart-through-april-11th/comment-page-1/#comment-770 The Global Inflationary Storm | Your Financial Future Mon, 09 Jun 2008 18:30:16 +0000 http://www.rapidtrends.com/blog/2008/04/12/m3-money-supply-chart-through-april-11th/#comment-770 [...] was talking about inflation. His point was, that the US continues to inflate (we are talking about monetary inflation here), and that all other countries are forced to inflate in order to maintain some semblance of [...] [...] was talking about inflation. His point was, that the US continues to inflate (we are talking about monetary inflation here), and that all other countries are forced to inflate in order to maintain some semblance of [...]

]]> By: Its Inflation, Stupid | Your Financial Future http://www.rapidtrends.com/2008/04/12/m3-money-supply-chart-through-april-11th/comment-page-1/#comment-630 Its Inflation, Stupid | Your Financial Future Sun, 01 Jun 2008 17:04:06 +0000 http://www.rapidtrends.com/blog/2008/04/12/m3-money-supply-chart-through-april-11th/#comment-630 [...] The problem we face to day in skyrocketing commodities, debt, a crashing dollar, sky high gas prices, food prices going up, electric bills going up, and on and on can be attributed to one thing: Inflation of the Money Supply. [...] [...] The problem we face to day in skyrocketing commodities, debt, a crashing dollar, sky high gas prices, food prices going up, electric bills going up, and on and on can be attributed to one thing: Inflation of the Money Supply. [...]

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