The obvious answer to me is the ECB, as the link between money supply and a rise in prices is about as strong as the link between pregnancy and sex:
I've heard a lot of wacky theories about the rise in prices, most notably that "food prices/ oil prices are driving inflation".
Anyone have any other wacky opinions of their own, or will anyone else join me in saying that we should take back our money from the ECB?
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too much money chasing too few goods and services.
:mrgreen:
Fianna Fail will allow the Irish People, to me milked like Milch Cows, by the CIF through high house prices, rents, and land prices, at the expense of competitiveness,and quality of life. FF+CIF=1
Pray tell me what 'CPI-U + lies' stands for................Originally Posted by 20000miles
The obvious answer to me is the ECB, as the link between money supply and a rise in prices is about as strong as the link between pregnancy and sex:
The CPI is a useless and biased indicator. For instance on the last day of the month, the people who 'calculate' the CPI look back at the data and decide what weights to attribute to different sectors of the economy. I don't even bother looking at the CPI data anymore. Too pointless. If the government and the CB allowed the people to know the full extent of the inflation they created there would be an enormous upheaval.
Needless to say, inflation is bad...
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Inflation/deflation are measures of Market imperfection.
The more liberal the Market, the greater the likelhood of Price Stability.
So from that point of view. Governments (ie voters), are responsible for inflation.
The role of the ECB is to use monetary mechanisms to manage the effects of fiscal policy across the EU.
A demagogue is someone who will preach doctrines he knows to be untrue to men he knows to be idiots.
No, a general rise in prices is a consequence of printing too much money.
Governments and the central banks are responsible for inflation. Be careful, dont equate government with individual voters.
The government could raise its revenue by taxing people, but people dont like taxes. It's much easier to use the printing press to finance spending and let everyone pay an 'inflation tax'.
The role of the ECB is to create inflation, and the following rise in prices as there is theoretically no limit to the money that can be created.
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If the money supply was limited to what central banks printed, we wouldnt be in such a mess. But about 90% of the money supply is created by private banks out of debt on a system of fractional reserve banking. It is this legalised fraud that leaves the middle and working classes having to work harder and harder and longer and longer just to maintain the same standard of living.
Wow. I agree with a RSF supporter!
My point is still valid though, the government can still debauch the currency through excessive printing to finance their spending. Inflation is a tax like any other.
Banks know that if they ever run into trouble in a fractional reserve system, they will *ALWAYS* be bailed out by the government. This enables them to act recklessly and still come out on top.
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Indeed, the people have been screwed with massive house price inflation driven by the banks creating money out of nothing but the borrower's promise to pay it back, and then when the banks nearly go to the wall due to this greedy, psychotic behaviour, the people get screwed again as the government prints money to shore up the banks and inflation (i.e. prices) shoots up and up.Wow. I agree with a RSF supporter!
My point is still valid though, the government can still debauch the currency through excessive printing to finance their spending. Inflation is a tax like any other.
Banks know that if they ever run into trouble in a fractional reserve system, they will *ALWAYS* be bailed out by the government. This enables them to act recklessly and still come out on top.
Ninety seven
pounds in every one hundred circulating in the economy will now have
been issued by banks (in the form of sight deposits, printed into
customers’ accounts as interest-bearing debts). Only three pounds are
cash, issued by the state (in the form of banknotes and coins, issued at no
interest). The cost to the state of issuing new money is only the cost of
producing banknotes and coins. The cost to the banks of issuing new
money is virtually zero. The state receives public revenues from issuing
cash, but banks make private profits. The benefits of the money system
are therefore being captured by the financial services industry rather than
shared democratically.
http://www.neweconomics.org/gen/uploads ... wMoney.pdf
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