The Ron Paul types and inflation

Discussion in 'Economy' started by cbirch2, Dec 16, 2011.

  1. cbirch2
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    cbirch2 Active Member

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    [​IMG]

    [​IMG]

    You know, you would think after seeing those two graphs people would stop crying about the federal reserve causing inflation....

    But no doubt they cant make any sense of those two graphs...

    Or understand IS-LM

    [​IMG]
     
    Last edited: Dec 16, 2011
  2. samjones
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    samjones Member

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    Ron Paul believes in the so-called Austrian School of Economics which strongly favors gold-backed currency and views fiat currency as anathema to sound economic policy.

    Ron Paul's economic doctrine has effectively become the party-line for the G.O.P.

    Three years ago the Fed started a series of policies that would greatly increase the monetary base. The essentially "printed" 2 dollars for every dollar we had. The Austrian School economists printed dire monetary inflation. It hasn't happened.

    This is an excellent example of a monetary theory being put to test and failing to prove its hypothesis, but rather than simply admitting that and moving on, Ron Paul and, by extension, the Republican Party instead have dug in their heels and are insisting that they are right and have been all along despite the abundant evidence that proves the opposite.

    Ron Paul would be an excellent addition to this message board.
     
  3. cbirch2
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    cbirch2 Active Member

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    Yea pretty much. The monetary base tripled at the same time inflation decreased.

    Its amazing, because no one outside of a presidential debate could still stand behind the strict views of Ron Paul. Its a sad state of our society, facts do not matter.
     
  4. pinqy
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    pinqy Gold Member

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    The problem is that the Austrian School generally discounts the CPI (or PCE) as a valid measure of inflation and inists on restricting "inflation" to mean only changes in the money supply.
     
  5. cbirch2
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    cbirch2 Active Member

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    Wow.

    Who cares about changes in the money supply if the price level remains the same?

    I guess he does call for an end to the fed. He would like to go back to the turn of the century when people like JP Morgan had to step in and save the economy and the government.
     
  6. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    Actually, as a liberal you apparently don't know that inflation is a function of both money and velocity (P=MV). No one denies this, especially in the short term, especially Friedman, but most agree that in the long term velocity reverts to the mean and so inflation is always and everywhere a function of an inflated liberal money supply.
     
    Last edited: Dec 16, 2011
  7. samjones
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    samjones Member

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    Inflation is a serious problem for people who have their life savings buried in the back yard.
     
  8. Dont Taz Me Bro
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    Dont Taz Me Bro USMB Mod Staff Member Gold Supporting Member Supporting Member

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    Slightly over 2% inflation per year is considered healthy by most economists.
     
  9. Mad Scientist
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    Mad Scientist Deplorable Gold Supporting Member Supporting Member

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    Too much fail.

    Inflation and the price of gold was pretty stable (low) from 1776 until 1913 when the Privately Owned Federal Reserve was created. Since then we've had many bubbles and crashes in our Economy as the Fed has increased and shrunk the money supply at their own whim. The Fed has had only one partial audit in it's almost 100 year history as well.

    The Fed is also (until recently) secretly loaning out trillions of dollars to foreign banks while getting back about 78 Billion of it in the last year. Simple math shows that at that rate it'll take about 200 years to pay it all back.

    If you did any research at all you'd know that International Bankers (Like JP Morgan and Goldman Sachs) are behind the Feds' current effort to destroy the dollar and remove it from it's place as the World Reserve Currency.
     
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  10. Paulie
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    Paulie Platinum Member

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    This post has much fail.

    First of all, price levels don't immediately change when money supply changes. The multiplier effect must first begin via bank loans. Banks for now have been very content with simply taking their excess reserves and investing them throughout the markets. If you look at commodities, things people need to survive, prices are anything but steady, much less low.

    And the other fail in your post is the JP Morgan part. I suppose you're unaware of JP Morgan's primary role during the 2008 collapse, where they backstopped much of the failure in the financial marketplace. And if it's not Morgan taking on these roles, it's Goldman.
     

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