Friday, February 06, 2009

Reason TV



Watch a Reason.tv interview of John Stossel

4 Comments:

At 2/06/2009 8:49 AM, Anonymous Machiavelli999 said...

Hyperinflation? Dollar devaluation?

My god, the CPI swaps are predicting deflation over the next 5 years, we are in danger of falling into a deflationary trap and you are STILL talking about inflation.

There is NO risk of inflation. None. In fact, if a risk of high inflation ever comes back that would be a great sign for the economy and mean that the economy had recovered.

 
At 2/06/2009 11:06 PM, Blogger QT said...

I love it.

 
At 2/07/2009 11:32 AM, Blogger Richard said...

To Machiavelli999:

M*V = P*Q

Money supply times velocity equals price times quantity of goods.

Currently, there are fears that velocity is down because people are afraid to spend and banks are afraid to lend. To get Q rolling, we have been throwing money at the banks, thereby expanding the money supply. What happens when velocity picks up again, and the banks are rife with Fed-induced capital?

P will explode to make up for the "too much cash chasing too few goods" issue.

 
At 2/09/2009 3:25 PM, Anonymous Machiavelli999 said...

Too bad I didn't see this post before.

You are right Richard. But my question is when on earth do you expect V to pick up enough to get P going up astronomically. If anything V is continuing to decrease.

Second of all, just like we have the power to increase M, we also have the power to decrease it as well.

 

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