tag:blogger.com,1999:blog-12897315.post1466909089611124582..comments2024-03-28T03:14:51.294-05:00Comments on Dad29: A Little 'Counter-Intuitive' Economics on PRCDad29http://www.blogger.com/profile/08554276286736923821noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-12897315.post-64547193367389778262009-11-21T11:42:51.095-06:002009-11-21T11:42:51.095-06:00"The price of gold is affected by the value o..."The price of gold is affected by the value of the USD..."<br /><br />Not always.<br /><br /><br />"The concern over inflation comes in when the economy actually begins to recover."<br /><br />Agreed. Which is why you institute a PAYGO system effective sometime around 2013 to keep the debt to GDP ratio in check. Easier said than done I know. <br /><br />now is not the time to worry about inflation was my point. One problem at a time thank you.J. Struppnoreply@blogger.comtag:blogger.com,1999:blog-12897315.post-394370702265575332009-11-18T06:07:12.122-06:002009-11-18T06:07:12.122-06:00The price of gold is affected by the value of the ...The price of gold is affected by the value of the USD...<br /><br />Yah, zero demand brings about zero inflation.Dad29https://www.blogger.com/profile/08554276286736923821noreply@blogger.comtag:blogger.com,1999:blog-12897315.post-16515327091126199222009-11-17T19:00:13.692-06:002009-11-17T19:00:13.692-06:00The concern over inflation comes in when the econo...The concern over inflation comes in when the economy actually begins to recover. The Feds have more than doubled the money supply,but it is mostly sitting on bank balance sheets. The inflation and the subsequent rise in interest rates will hit when the banks start lending and putting that cash out into the public. The money supply was only increased by about 13% during the Carter recession causing interest rates to go up to 20% or more.neomomhttps://www.blogger.com/profile/04830635556787370135noreply@blogger.comtag:blogger.com,1999:blog-12897315.post-44322965211433122672009-11-17T15:35:36.737-06:002009-11-17T15:35:36.737-06:00Thank you for the counter-intuitive take Dadster. ...Thank you for the counter-intuitive take Dadster. I wish you would post more of these from time to time.<br /><br />Real quick: I was at a small business owners meeting the other night and all the talk was regarding the government's "inflationary" policies and how we somehow should be taking lessons from Zimbabwe (of all places). <br /><br />I'll say this again: you cannot have inflation with a collapse in aggregate demand the size of which has ocurred globally in the last year. You cannot tell me that inflation should even crack our top 10 list of "shit that we should be really worried about" right now. We have oil tankers sitting off the Gulf coast with no where to go. We have the PRC dumping steel on the global market because they're overshooting production by a landslide. You can't tell me the world changed so much in the last 2 months that $1,150 oz. gold prices are justifiable in a world with massive excess capacity. You think maybe the trading desks of the major banks in this country have a bit to do with this sudden rise in commodities? They gotta park their free money somewhere. Might as well bet on a quick snap-back in economic growth considering that the contrary scenario will leave them out on their asses anyway. <br /><br />In terms of core CPI, do we really think the business owner is going to "pass along" his cost increases to the consumer who isn't buying his stuff to begin with? What about at the wholesale level? The answer is no. We have much more to worry about than inflation right now. Get it out of your head America. Lin is RIGHT.J. Struppnoreply@blogger.com