[FoRK] inflation / deflation; small point on currencies vs. money
Andre Uratsuka Manoel
andre at insite.com.br
Sun Sep 27 07:46:11 PDT 2009
New to the list, even though I know many of you from other lists.
On Sun, Sep 27, 2009 at 10:52, Jeff Bone <jbone at place.org> wrote:
> An excellent summation. The point he doesn't make strongly enough, IMHO, is
> that depending on timing one or the other of these forces could easily get
> on a non-linear trajectory, outpacing the other, depending on the vector in
> which it enters and impacts the real economy. As mentioned yesterday, I
> think that inflationary potential edges out the deflationary potential just
> slightly --- two primary reasons, one being our dependence on imports,
> particularly from Asia, and second being the bias of our central bank. If
> that occurs, then we could easily and rapidly see not just inflation in
> terms of currency vs. CPI or (better) WPI, but actual hyperinflation.
Actually, no, I don't think you are even close to hyperinflation
because it is actually not easy to get to that.
Being Brazilian, I lived through very high inflation for most of my
life. In our last year of extremely high inflation, 1994, the
inflation rate was of 40%... per month. It was not pretty, but it was
possible to live through and it is possible to fight with monetary
policy. A deflationary spiral is another story.
André Uratsuka Manoel | andre at insite.com.br
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