What should fed policy on inflation (in general) be?

Discussion in 'Politics' started by OohPooPahDoo, Sep 2, 2011.

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What should the long term inflation policy of the fed be, and why?

  1. More than 4% (hyperinflation)

    0 vote(s)
    0.0%
  2. Between 1% and 4% (normal inflation)

    3 vote(s)
    42.9%
  3. Bewtween -1% and 1% (no significant inflation or deflation)

    1 vote(s)
    14.3%
  4. Less than -1% (deflation)

    3 vote(s)
    42.9%
  1. OohPooPahDoo
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    OohPooPahDoo Gold Member

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    Poll pending....

    My answer - 1% - 4%

    Because hyperinflation makes it hard to get loans, which is bad for the economy

    Because deflation makes it hard to pay off loans, which is bad for the economy

    and because a small amount of inflation makes it easier for folks to pay off their home or business loans over time.
     
    Last edited: Sep 2, 2011
  2. westwall
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    westwall USMB Mod Staff Member Gold Supporting Member Supporting Member

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    You need to work on your definitions. Hyperinflation is defined as "ruinously high increase (50% or more per month) in prices due to the near total collapse of a country's monetary system, rendering its currency almost worthless as a medium of exchange."

    I think Germany still holds the record at 322 percent per month for 15 months. Though Zimbabwe might be catching up.
     
  3. Charles_Main
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    Charles_Main AR15 Owner

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    I personally think the Fed should not be in the business of trying to Manage The Economy. seems they tend to just do damage anyways.
     
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  4. Baruch Menachem
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    Baruch Menachem '

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    Record for inflation rate was in Hungary after WWII.

    Still, the goal is to keep inflation at a minimum while not strangling normal economic growth.
     
  5. Fyght
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    Fyght Member

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    Mild deflation, but that scares economists. Sure, loans will be harder to pay off, but people's labor will only appreciate rather than depreciate.
     
  6. eflatminor
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    eflatminor Classical Liberal

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    Show me where price controls have worked. You can't because they never do. Why then do you support the price of money being controlled by unelected central planners? End the fucking Fed.
     
  7. kyzr
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    kyzr Gold Member

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    The Fed can't work miracles when the DC whores don't balance the Budget. With Medicare going insolvent in 2017, you'd think that would make an MSM headline or two?!
     
  8. zonly1
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    zonly1 Probie still throwin'em

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    I believe bolstering/increasing the purchasing power of the dollar and holding on to the global currency status is more importantand should be a high priority issue, but in the current state of cheap money printing press; inflation is inevitable. Cheap money trickles down to our goods and services we consume/purchase. Bernanke is making a big mistake with lower interest rates which kills our existing purchasing power of the dollar.
     
  9. editec
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    editec Mr. Forgot-it-All

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    The national money supply ought to inflate or deflate depending on the aggregate amount of goods and services a nation produces.

    Good luck trying to make that work, of course.
     
    Last edited: Sep 7, 2011
  10. OohPooPahDoo
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    OohPooPahDoo Gold Member

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    So they should just set an interest rate and stick to it?

    What should the rate be?

    What if significant deflation hits - or hyperinflation - they should just sit and do nothing?

    THEY CONTROL THE MONETARY BASE
     

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