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Katy Delay

 
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  • Is Gold Back? [View article]
    To address Logical Thought's first comment, my sentence was incomplete. It should have read: "What gold tracks is the quantity of money circulating relative to the amount that should be circulating." Thanks for the elbow nudge.
    Nov 15, 2010. 06:43 PM | 1 Like Like |Link to Comment
  • Is the US Printing Money Like Mad? [View article]
    Okay I agree, this may not be Weimar; but one thing you don't mention: Money supply isn't an abstract phenomenon; it evolves out of an economy. In other words, without central bank intervention, it would evolve out of and be closely related to something in the economy, let's say GDP plus stable credit ratios (you might find that better than me).

    What if, without the Fed, the economy would have created less money supply, but the figure the central bank was targeting, even though not high in the abstract, was above that need? You might not get Weimar, but you'd still have an inflationary scenario that wouldn't appear on your anyone's radar screen.

    In other words, inflationary purchasing media is created when the money supply is excessive relative to production (or some such factor). You cannot look only at money supply in a vacuum, and make any interpretation about whether it's appropriate, excessive, or insufficient.

    The same principle applies to the CPI. Prices might even remain stable (which they are not) or be falling; but even stable or falling they might be inflationary compared to what they should be. For example, technology and productivity advancements should decrease our CPI, but we don't know by how much. If that figure is high, then even 2 percent CPI increase could represent 5 percent inflation in the true sense of the term, i.e. inflationary purchasing media in circulation.
    Sep 18, 2007. 02:52 PM | 1 Like Like |Link to Comment
  • Gold's Value In the 21st Century: About As Real As the Myth of El Dorado [View article]
    I agree with Scotty295 and NiravDesai. And to answer Matt's query "What am I missing?", I will simply reinterate my mantra:

    "You can take gold out of the standard, but you can't take the standard out of gold." - Katy Delay

    In other words, gold may not be the official standard bearer in the eyes of the central bankers, but it will always be so for the people. And that's just the way it is, folks.
    Aug 19, 2007. 06:18 PM | 1 Like Like |Link to Comment
  • A Tale of 2 Inflation Rates [View article]
    I like the article. I also think it is important to point out to readers that the word "inflation" is confusing because it's used by many people--laypersons and economic academicians alike--to mean one or both of two distinct phenomena: (1) price increases, no matter what the cause; and (2) general or specific price increases caused by an excess of purchasing media.

    The public is concerned with (1). The Federal Reserve board members are concerned with both (1) and (2), but mainly with (2), because they believe they control the supply of purchasing media and prefer core numbers because these do not include price increases caused by factors outside the Fed's "control." (Whether their efforts to control the money supply are efficacious or deleterious is a discussion for another day.)

    The market is concerned with both, because players are in the business of making money, which business depends on what both the public and the Fed board members do.

    Economists would do well to invent another word for either (1) or (2) so as to be more clear. Their semantic slight-of-tongue makes one wonder just what their real intent is, i.e. whether it is to clarify or to confuse. Surely they know the difference... don't they?
    Jun 17, 2007. 05:11 PM | 1 Like Like |Link to Comment
  • Inflation Is Already Here (You Just May Not Be Looking In The Right Place) [View article]
    Two comments about some of the counterarguments above:

    1. Even if velocity were lower (which it is), and accepting that this reduces the pressure on nominal prices to rise, this fact does not invalidate my argument. In other words, both can exist simultaneously.

    2. You ask why would we want nominal prices to fall generally? Because falling prices gives every single consumer more purchasing power. Or more accurately, it restores deserved purchasing power to each consumer. Under a stable monetary unit, prices should be falling a few percent every few years because of technological advances. Monetary authorities are reallocating this advantage through their fiddling with the money supply.

    By their fiddling, they are not only stealing our purchasing power, but they are creating dangerous bubbles. Unfortunately, since the bubbles were (and may be again becoming) huge, they tend to deflate rapidly given the nature of the marketplace. I understand the incentive of the Fed bureaucrats to want to avoid the carnage of a rapid price deflation, especially given that everyone will blame the Fed bureaucrats (and rightfully so, albeit for the wrong reason, since it is the Fed who drove–and continues to drive–the excessive money creation in the first place). It is probably true that a rapid price deflation can be dangerous to the system, but even this fact does not justify maintaining excessively high prices relative to real prices, just to save the skin of a few overly zealous bureaucrats. After all, every dollar creditor in this country (and internationally) is getting screwed. Why the bias in your argument for the debtor? You might answer that our government is the No. 1 debtor and it must be bailed out. I disagree. The excessive credit furnished to our government is allowing legislators to kick the can down the road. By sweetening the pot of debtors, you are encouraging risk taking and wasteful speculative activity (which leads to misallocations of capital) and you are feeding what is becoming an incurable and extremely dangerous moral hazard. Keep it up, and you will destroy our economy, the dollar, and possibly even the American experiment altogether. (We came close to doing this in the 1970s, but apparently the lessons were not learned.)
    Feb 24, 2014. 11:44 AM | Likes Like |Link to Comment
  • The Austrians Are Right - Inflation Is Coming [View article]
    Regarding price inflation, you may be interested in a new index created by the American Institute for Economic Research, called the EPI (Everyday Price Index). See it here:

    https://www.aier.org/epi
    Nov 26, 2013. 07:01 PM | Likes Like |Link to Comment
  • Death of a Business Model: NetBank [View article]
    I find it amazing this business model would not be even more efficient that the classic one. Can someone explain how the absence of commercial space rent and of employee expenses can be a handicap? Where, then, do the outlays lie?
    Oct 2, 2007. 04:09 PM | Likes Like |Link to Comment
  • Death of a Business Model: NetBank [View article]
    I find it amazing this business model would not be even more efficient that the classic one. Can someone explain how the absence of commercial space rent and of employee expenses can be a handicap? Where, then, do the outlays lie?
    Oct 2, 2007. 04:09 PM | Likes Like |Link to Comment
  • The Top-Line and the Core CPI: A Tale of Two Inflations [View article]
    See comment below.
    Jun 17, 2007. 04:01 PM | Likes Like |Link to Comment
  • The Top-Line and the Core CPI: A Tale of Two Inflations [View article]
    Both Picerno and sbh_home have great points. I would like to get a better grasp of sbh_home's ideas on this subject. Do you have a blog or website?
    Jun 17, 2007. 04:00 PM | Likes Like |Link to Comment
  • Where's the Inflation? Check the Non-Core Components of the PPI and CPI [View article]
    I disagree. Please see my own post at:

    sybilstar.blogspot.com...

    To raise or lower rates now would be a catastrophe. See my reasoning at the above link.
    May 15, 2007. 03:05 PM | Likes Like |Link to Comment
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