[ExI] Inflation graph

[John Clark]

On Sun, Oct 27, 2013  spike <spike66 at att.net> wrote:


> > The comment itself presupposes that inflation is some kind of fiat
> number somehow dictated by some central power somewhere.  [...]   If
> reduced to one number, it does throw away some important subtleties.
>

Spike, if the graph
http://www.nytimes.com/interactive/2013/10/27/business/economy/inflation-falls.html?ref=economy
were inverted and thus supported your economic theories would you still be
saying that inflation can't be quantified and making other excuses? And
it's silly to think that inflation is the only disaster that can befall a
economy, look at the 2 charts directly below, the first one shows the rate
of inflation in Japan and the second shows the rate of GDP growth in Japan.
The Japanese economy has been stagnate for almost 25 years, it started
about when deflation (not inflation!) became a problem.

[image: Chart - historic CPI inflation Japan - long term inflation
development]



> > just use Zimbabwe money.  It is already printed and available in larger
> denominations
>

If inflation can't be quantified what makes you think that the countries of
Zimbabwe or Weimar Germany ever suffered from inflation?


> > An analogy would be to derive a number to express how fast plants grow.
>  How would you do that?
>

A graph of biomass produced per unit of time would certainly provide some
valuable insight on that question.

> 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.
>

Richard Feynman once said that String Theory is not really a scientific
theory at all because it does not create good predictions it just creates
excuses. Printing presses have been in massive overdrive for well over a
decade printing lots and lots of money, and according to your theory we
should be in massive inflation by now; and as can be clearly seen by this
chart  we are not.

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

Richard Feynman also said that when a theory doesn't fit the facts it must
be abandoned no matter how beautiful or well loved the theory may be. Ten
years ago I too would have predicted huge inflation if the printing presses
continued to operate at the rate they were at it would create huge
inflation, but in spite of the fact that the presses have actually
accelerated my prediction failed miserably, therefore I must change my
economic theories.

  John K Clark
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