Posted by
PsySciGuy on Wednesday, July 15, 2009 2:23:22 PM
An article on Yahoo News (http://news.yahoo.com/s/ap/20090715/ap_on_bi_go_ec_fi/us_economy_17) by
MARTIN CRUTSINGER, AP Economics Writer paints a rosy picture of a low inflation future. Now I'm not an economist but I was a scientist. I also took the obligatory undergraduate classes in engineering economics. I've also read a few books on economics and economic theory. So, I have a real conflict between Martin's article and
everything I've read about economics.
The greatest deficit spending in the history of the US isn't going to devalue the currency? Huh?
"The big jump [the biggest one-month gain since a 0.7 percent increase last July] was seen as a temporary blip, however. Inflation is not
expected to be a problem any time soon given a severe recession which
is keeping a lid on wage pressures."
The
conventional wisdom. Unfortunately, we are not in
conventional
times. The cost of production has been decoupled from wages. This
effect will be magnified by speculators, fear, and the current
government intrusion in the marketplace.
My expectation is that wages will not increase, that unemployment will increase, and money
will devalue.
Since deficit spending by the central government has a well know effect on inflation, one might ask why the Obama administration has blissfully created the greatest deficit spending in the history of the US?
I believe the answer was provided in those lefty college courses he took. The answer was later reinforced by his Progressive enablers and his Acorn comrades.
- "Lenin is said to have declared that the best way to destroy the
Capitalist System was to debauch the currency. By a continuing process
of inflation, governments can confiscate, secretly and unobserved, an
important part of the wealth of their citizens. By this method they not
only confiscate, but they confiscate arbitrarily; and, while the
process impoverishes many, it actually enriches some." [...]
- "Lenin was certainly right. There is no subtler, no surer means of
overturning the existing basis of society than to debauch the currency.
The process engages all the hidden forces of economic law on the side
of destruction, and does it in a manner which not one man in a million
is able to diagnose." (1919, John Maynard Keynes from The Economic Consequences of the Peace.)
Stand by for "debauchment" on a grand scale...