[ExI] Inflation graph

[spike]

>. On Behalf Of John Clark
Subject: [ExI] Inflation graph

 

>.For those who think that inflation in the USA is the most important
economic problem in the world today and is so high that every effort, no
matter how draconian, should be used to decrease it, take a look at this
graph: 


http://www.nytimes.com/interactive/2013/10/27/business/economy/inflation-fal
ls.html?ref=economy



 >.John K Clark

 

On the contrary sir.  The comment itself presupposes that inflation is some
kind of fiat number somehow dictated by some central power somewhere.  A
more accurate description is a number which is derived by governments to
describe what exists.  If reduced to one number, it does throw away some
important subtleties.  An analogy would be to derive a number to express how
fast plants grow.  How would you do that?  Once you have a way to express in
one number how fast plants grow, you are ready to derive a single number to
describe inflation.

 

Once you figure out a way to do these things, you are ready to command by
some means the rate of plant growth and the rate of inflation.

 

Some have suggested that we can artificially raise inflation by printing
money without any wealth behind it.  This does create inflation, but only
the particular currency of the nation that attempts it, as was seen in
Weimar Germany and in Zimbabwe.  I recommend a cheaper way of doing that:
just use Zimbabwe money.  It is already printed and available in larger
denominations, it is already printed on high quality paper, etc, and costs
less than the raw paper used in printing American money, since it is already
soiled by ink with lots of zeros on it.  Had the people of Zimbabwe been
more aware of the concept of exponents, their government's game could have
still been operable to this day, for their currency would not have run out
of room to add more zeroes.

 

John, we do not control inflation.  The government does not control
inflation.  It does derive a single number, an average of sorts, to try to
describe it, but note that manufactured goods have been deflating for some
time, while fuel and food prices have risen sharply, while labor prices, and
ESPECIALLY medical insurance prices, have inflated dramatically at the same
time.  So I ask you sir, what is the current inflation rate?   What does
that chart you provided actually describe?

 

spike

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