ShackledNation
Libertarian
- Thread starter
- #41
First of all, you are comparing a chart with absolute data (supply of money) with percent change data (inflation rate), which is completely meaningless. You would have to compare percentage change of one with percentage change of the other, not absolute value of one with percent change of the other. So right off the bat, you have useless comparisons.And your spending will cause prices to rise, lowering the standard of living for everyone who did not get newly printed money. So in other words, you are indirectly stealing from everyone else.If the fed will print me 50K I promise to spend it in America on American products. I swear I will.
Here's a chart showing Federal Reserve base money:
Here's a chart showing the inflation rate:
If there were a direct relationship between the money supply and inflation rate these charts would have something to do with each other. Austrians and Monetarists predict there should be such a relationship. Why isn't there?
Second of all, there are different measures of prices and different measures of the money supply. Official government numbers often grossly underestimate inflation, because they ignore certain prices. Measures of the money supply are also often incorrect. Rising prices also are not realized immediately. Prices will rise where the new money is spent or invested. If new money is put in the stock market, stock prices rise. If new money is put into housing or education, housing and education will rise. The effect of an expansion of the money supply is not uniform throughout the economy. Food items, often affected most by such inflation because money always goes to food, are not even counted in many CPI calculations, completely distorting the numbers.
Third, prices are not only affected by the money supply. They are also affected by the production of an economy. So simply comparing the rate of rising prices with the rate of money supply growth completely ignores the affect of increased supply of goods on the general price level.
Lastly, Austrians do not predict there is a direct relationship between money supply and prices. In fact, Austrians continuously stress it is possible for their to be an increase in the money supply and a decrease in prices. Austrians define inflation as it has traditionally been defined as "the expansion of the money supply" so it is possible you have come to false conclusions based on misunderstanding of this concept.
1. Your statistical method is wrong.
2. The argument you are trying to disprove was never made.
3. You assume that money supply is the only factor in determining the price level, which is false.
In other words, absolutely everything you said and the way you presented your argument is completely and utterly false.
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