...the Keynesian Cargo Cult that dominates all central banks and governments believes with quasi-religious certainty that people respond to inflation by buying more stuff now rather than later: since prices will rise in the future, it makes sense to buy stuff now at lower prices compared to next years prices. This is called bringing demand forward, as the demand to buy stuff is shifted from the future to the present. In an economy dependent on debt-based consumption, inflation is absolutely essential to reduce the real costs of servicing old debts so households can afford to buy more stuff on credit. This is the basis of the Feds insistence that inflation is equivalent to growth--inflation enables households to continue adding more debt to buy more stuff, as long as earnings inflate along with prices. charleshughsmith.blogspot.ru/2014/07/the-rot-within-part-ii-inflation-is-not.html
Posted on: Wed, 23 Jul 2014 11:14:22 +0000