Jun 28 2006
Inflation no worry?
“I don’t have to worry about inflation because Ben and his partners are doing that right now for us and I think will be successful in controlling it.”
– Edward Lazear, Chairman of the White House Council of Economic Advisers before the Joint Economic Committee of Congress
We really don’t know where to start with that one.
It’s certainly symptomatic of the combined gross misrepresentation of what inflation is by the “experts” – along with the complete misunderstanding of what it is by the public. If folks understood the basics — they would laugh and be outraged at the same time upon hearing such a comment. The reasons Congressmen do not react in such a manner are far more worrisome.
Look everybody – you really need to understand the basics — so let’s start with them.
Webster’s 2006 definition of inflation is:
“An increase in the volume of money and credit relative to available goods and services resulting in a continuing rise in the general price level”
Webster’s 1913 definition equivocates far less – getting right to the point:
“Undue expansion or increase, from overissue; — said of currency. [U.S.]”
The most important thing to note here – is that inflation today is being defined by it’s symptom (rising prices) – and not what it really is – the expansion/over issue of the Dollar and credit. This is important – because to define inflation by it’s symptom (rising prices) is as inaccurate as defining drunkenness as by it’s primary symptom – stumbling! (“What’s wrong with him?” “Oh, it looks like he’s got the stumbles).” Folks – it’s ridiculous, and it’s been happening right in front of your eyes!
Again – inflation is the expansion/over issue of the Dollar and credit. Prices simply rise because the ever-increasing supply of money continues to drive the overall purchasing power of the Dollar down.
So when a senior economic advisor to the president states that “Ben and his partners” are controlling inflation while the chart below indicates the continually exploding money supply…
Causing the Dollar’s value to plummet as seen here….
…How in the world can a rational, informed person believe him?
We don’t.
