Ron Paul Questions Ben Bernanke on the Definition of Inflation 07/21

Credit is NOT virtual money, nor is it counted in the money supply. There are therefore, various types of credit which act in different ways given different extrusions, such as that from the fractional reserve system, or the extension of credit cards, car loans, consumer loans, etc. The statement that "we had a credit bubble that added trillions of dollars to the money supply" is a bit simplistic and does not take a multitude of factors into consideration when speaking of credit as though it was actual or virtual money, it is not. Deleveraging is not the same as deflation [although there is definitely narrow deflation that takes place under such circumstances] they are two different animals completely and is not necessarily indicative of broad deflation, which, by the way, we are not seeing.

One of the most prevalent and the most common problem with any total fiat monetary regime is inflation, one of the most rare is deflation. In fact, it is almost impossible for deflation to occur under a total fiat monetary regime and there is a very good reason for that: the central bank controls the money supply. Until there is a massive contraction in the actual money supply monetary deflation is not an issue. While there may be other types of deflation associated with this burst portion of the business cycle, the proper terms would be more closely defined as disinflation instead of deflation.

Remember, we have had 96 years of inflation which has been incremental in design and execution by the FED; think of inflation as depreciation because that is exactly what inflation is, it is the systematic depreciation of the currency to the point that is real purchase value is next to nothing. In order for actual appreciation or deflation, as we commonly think of it, to take place there would have to be a massive and extremely rapid appreciation in the purchase value of the currency...I don't see that happening because I know that is not the monetary policy of the FED or this government. I personally would love to see the purchase value of each dollar increase or appreciate to even 10% of its face value, what a difference that would make in the purchase value of the currency. That's not going to happen because it will not allow for the redistribution of the productive wealth of the people of this country into the hands of the politically connected and the government itself.

http://www.1776solution.blogspot.com

“There is danger from all men. The only maxim of a free government ought to be to trust no man living with power to endanger the public liberty.”-Adams

....I've seen things that used to cost $2.99 now cost $5.99 or $6.99

There's always some products which go down in price during inflationary periods....But when hyper inflation hits, the prices of all those average products will hit nearly $10...

Luckily the state regulatory agencies can afford to price things according to demand so that when inflation hits......Other less known items drop in price..Just as it's always worked

so there is no waiting period. no lines. no whens. it's already happened and is happening.

that was equally entertaining.

open your mouth? Did you challenge them? I couldn't resist it. ;-)

"never keynes a running system"

he probably wears diapers when he's facing the good doctor!

Ron Paul is my President