Baseball Cards and the Cause of Inflation

[Issachar]

Inflation is an expansion in the money supply, Schiff explains. And with more dollars circulating, those dollars are worth less, or put another way, the things we trade dollars for – goods and services – take more dollars to purchase. “Any kid who collects baseball cards understands it,” Schiff writes. “The more a particular card is in circulation, the less it is worth.”

As the federal government goes into hock, so has the U.S. consumer. Ultimately, these debt problems will catch up to us, according to Schiff, with the result being a substantial reduction in the American standard of living. Except for those following Schiff’s advice laid out in three steps that are the last three chapters of Crash Proof. http://www.lewrockwell.com/french/french58.html

I'm amazed at how many still believe that inflation is the increase in prices. Not too amazed though considering that is what continually rolls off the tongue of the central bankers. They know what inflation is and they know they are the cause. They also know that they create it and control it despite what Mr. Greenspan and now Mr. Bernanke keep saying; "inflation continues to be a problem". Ya think?

Issachar

[Enlightened]

I'm amazed at how many still believe that inflation is the increase in prices. Not too amazed though considering that is what continually rolls off the tongue of the central bankers. They know what inflation is and they know they are the cause. They also know that they create it and control it despite what Mr. Greenspan and now Mr. Bernanke keep saying; "inflation continues to be a problem". Ya think?


It's a chicken/egg situation. Inflation is too much money chasing goods and services and inflation is rising prices. It's both. That is why the Fed raises interest rates from time to time--to tighten the money supply. Prices go up because the money supply is too abundant.

Now, please show me where Greenspan and Bernanke have said that "inflation continues to be a problem". It's been running around 3% for the last 7 years, and was under 2% for a while early in this decade.

BTW, what are "central bankers"? Do you mean the Federal Reserve?

[Issachar]

Good morning Enlightened.

From ten years ago:
It was an uncharacteristically unambiguous statement from Mr. Greenspan, who was giving his semiannual testimony to the Senate Banking Committee on central-bank monetary policy. http://www.iht.com/articles/1997/02/27/fed.t_0.php

The article at the above link shows Mr. Greenspan being concerned about inflation. I underlined a "side remark" simply as an example of showing the Federal Reserve to be a "central bank". (I think that central banking is a bad thing but it is here to stay until our Lord returns.)

From 7 years ago:

Federal Reserve Chairman Alan Greenspan has informed the American people that they can expect to see higher interest rates for the rest of the year. In his recent testimony before the Congressional Committee on Banking and Financial Services, Greenspan stated that the unprecedented growth in production and employment in the economy is a threat to the future stability of the country. And to meet that threat, America's central bank will try to rein in growth by making it more costly for both consumers and businessmen to borrow.

Several times during the past year and a half, the Federal Reserve Board has increased the Federal Funds rate--the rate at which banks lend money to each other--to try to slow down the rate of spending in the economy. The rationale has been that the impressive expansion in the quantity of goods and services has produced an unstable boom in the stock market and is placing dangerous pressures on an already-tight labor market that threatens to set off a new wave of price inflation.

There is one big problem with Greenspan's argument. It is the monetary policy of the Federal Reserve that has created the danger of inflation, not the productive energies of the American people. http://www.fff.org/comment/ed0500d.asp

From 2 years ago:
... past speeches show that like most economists, incoming Fed chairman Ben Bernanke to some degree shares the view that inflation is a monetary phenomenon caused by excess money creation relative to demand. We know this because, in contemplating whether or not the U.S. might hit a deflationary patch in the early part of this decade, Bernanke alluded to the Fed’s ability to use open-market operations to reverse any deflationary occurrence.

Despite this conventional view, Bernanke has on more than one occasion described inflation and deflation in demand terms exclusive of money. His thoughts in this area are crucial given the classical view that demand-driven price spikes are not inflationary and are instead indications of scarcity. Conversely, falling prices due to lack of demand aren’t deflationary; instead they are indications of excess supply. If the Bernanke Fed defines inflation and deflation in demand terms — and worse, responds to this way of thinking — it will by definition distort the price signals that markets use to root out both scarcity and glut. http://www.nationalreview.com/nrof_comment/tamny200511100903.asp

2 years ago:

Start with WIN. That was the Whip Inflation Now campaign of the '70s when Greenspan headed President Ford's Council of Economic Advisers. Through much of his Federal Reserve Board chairmanship in the late '80s and '90s, Greenspan was an inflation hawk.

At the start of this decade, deflation and recession became the real bugaboos facing the economy. So Greenspan turned to a strategy that you could call SIN, as in Start Inflation Now, if only to get the economy going.

But now that the Fed has won the war on deflation and the economic expansion is more than three years old, the central bank's strategy is shifting once again--and the markets are getting woozy.

On the rise. This time, let's call it SPIN, or speak out about inflation now (while also downplaying its threat). This shift became clear last week when the Fed raised interest rates for the seventh time since June, bringing the federal funds rate--which banks charge one another on overnight loans--to 2.75 percent.

The Fed also did something it hasn't done for a while: warned investors about the "I" word. "Though longer-term inflation expectations remain well contained, pressures on inflation have picked up in recent months and pricing power is more evident," the Fed's Federal Open Market Committee said. http://www.usnews.com/usnews/biztech/articles/050404/4fed.htm

There is a lot that can be found where Mr. Greenspan is talking about "inflation concerns", which always amazed me because it is the central bank, the Federal Reserve (which we all know is not federal nor a reserve), that controls that to the penny. They create more dollars than there is productivity to warrant and thereby devalue the dollar so we need many more of them to buy the same thing. Since I was born in 1952, the average inflation has been between 1200 and 1300 percent. I don't care about the latest "inflation figures" for the past month or quarter or even year or two ... I look at decades and overall economic policy. If wages since '52 went up 1200 to 1300 percent, no one would notice. No one would care. But, as we all know, savings rate per household went from about 20 percent in the '60's to the present negative 2 percent now. Why? Because folk want to maintain the same standard of living and it took more and more of their wages to do so because wages don't ever keep up with inflation. If they did, there would be no point in a country establishing a central bank and going to a fiat economy. But with central banking and a fiat economy, wealth can be taken from the working folk and transferred to the already wealthy. The "already wealthy" don't need more money so that they can buy the latest, fastest computer for their home or a grand new stereo system ...... no. They can already buyt whatever money can buy. The "more" is for power and control.

Welcome the NWO, funded by ..... us, via inflation.

Issachar

[GildedHammer]

They create more dollars than there is productivity to warrant and thereby devalue the dollar so we need many more of them to buy the same thing.

Issachar

My question is why are the FEDs printing more money since they stopped reporting the M3? Is it to counter China who hasn't been playing fair with regards to their own currency value?

Agape,
GildedHammer

[Issachar]

My question is why are the FEDs printing more money since they stopped reporting the M3? Is it to counter China who hasn't been playing fair with regards to their own currency value? We can't be sure .... but since they stopped publishing the M3 data, I think it is totally fair to assume (something that should be done very rarely) that they are creating more dollars than ever and wanted the markets/economy to be somewhat shielded by it's effect. I don't about "countering China", but the bottom line is, a LOT more funding was needed/is needed for something; i.e. The present war in Iraq, increased "security" in the form of creating "big brother", war with Iran ...... some of this? All of this? All of this and more? Prop up the markets? In time, it will come out. Hiding the M3 is only a means of initially shielding the public ... soon, if my guess is right, it will bear fruit for all to see and bitter will be the fruit thereof.

Issachar