I have no Inflation - Because I sent it to You
Or, if you like, print a whole bunch of money, wait three minutes, and then say, "See? Printing money doesn't cause inflation. If you believe otherwise, you're probably a secessionist, or a communist, or maybe one of those people who believe the US is becoming a fascist state."|
As a digression, here's a link to a lovely article titled, "Is is fascism yet?", pretty much demonstrating that the US is indeed well on the way to transforming itself into precisely a fascist police state. Read this, and see what you think. Click Here
But back to the good stuff.
Krugman then tells us that "... consumer prices rose only 1.2 percent in 2010...." But then, the piece de resistance: "The Fed’s preferred measure, which excludes volatile food and energy prices, was up only 0.7 percent ..."
It must surely not have escaped the notice of thinking people anywhere that the FED's "preferred measure" of inflation excludes food and energy costs - a great comfort to all those Americans who neither eat nor drive. If the wise foxes at the FED excluded housing and clothing, the inflation rate would be lower still. And of course, nothing is as volatile in the US today as housing, so we have lots of justification for this exclusion.
It amazes me that a man pretending to be an economist would accept such nonsense as an inflation measure that excludes two of the most important items. And they're important not because they are 'volatile' exactly, but because they tend to move quickly and are an accurate measure of items that directly affect the living costs of everyone - real inflation, in fact.
And the fact is that the US currency sure is being debased. You can't print and distribute two trillion dollars and then just pretend the chickens will never come home to roost. How long ago was it that a fine new home in the US cost about $25,000? Tell me the currency is holding its value.
And as Dr. Krugman knows only too well, the main reason inflation has not yet reared its ugly head in the US is that much of that printed money has gone to Brazil and other developing countries, driving their currencies up by as much as 30% in one case, and causing rising prices across the board. In fact, the US, by keeping its interest rates at effectively zero, is simply exporting its inflation to the rest of the world, especially the developing world.
The FED's QE2 is also in part responsible for the rapid increase in worldwide food prices. With the US economy still in a shambles and not many places to invest free money, the Goldmans and Sachs of the US have turned to commodities and food, thereby endangering either recovery or development in much of the world.
China today is suffering an inflationary attack from the same cause. The US, by virtue of the dollar being the international reserve currency, is able to export its inflation just as easily as it exports revolution, poverty, torture manuals and cool stuff for killing people. Oh, and democracy and human rights too.
This is all part of a scene that has been repeated often - the US inflating itself out of debt by passing the adjustment pain to the rest of the world. And Dr. Krugman knows that better than anyone. He recently wrote that since Greece was tied to the Euro it was (sadly) impossible for that country to just inflate itself out of debt, and then (much less sadly) told us how the US has done that whenever the occasion demanded.
No country can print trillions of dollars and run interminable trillions in deficits without someday having to pay all those bills and having its currency badly debased. What nonsense by Dr. Krugman. And why would the NYT believe anyone cares to read such biased drivel? I would be ashamed to write such things.
It was also interesting to see Krugman defending the FED so quietly but hysterically, and being so mean-spirited in the process. He tried to laugh off accusations of the FED being a "counterfeiting operation", but I believe the US FED is widely, and accurately, recognised throughout the world as a “legalized counterfeiting operation.” That's hardly a secret, and it's a position Krugman has himself agreed with.
And most thinking people might agree with Mr. Ryan that the FED likely should be abolished, along with other US one-of-a kind Christian specialties like the CIA's extraordinary renditions, Guantanamo Bay, the new secret black prison at Bagram and the new secret "peace medicine" torture lab in Indonesia. And we could add to that a Christian President who puts out hit contracts on people he doesn't like. What a country.
The first is titled "Paul Krugman appears to have lost his marbles". It appears increasingly likely that Alan Greenspan may not be the last economist to totally discredit himself. Read Here
The next contains many comments Krugman received from readers (in NYT posts) on his incoherent, raving article. Read Here
The third is titled "More Nonsense by Paul Krugman ...", on the Chinese RMB and the US trade deficit. Disingenuous, to say the least. Read Here
The last is a scholarly refutation made in response to one of Krugman's Error-Ridden Articles, written by Raghuram G. Rajan, who was foolishly attacked and misquoted by Dr. Krugman in one of his nonsense articles. Read Here
The Structure of the US Economy Today
A brief look at Trade Surpluses and Deficits
Let's have a Financial Crisis