Thursday, November 15, 2012

Hyper about inflation

I don't claim to understand economics all that well:  but then again, it's a field in which the alleged experts  can't agree, particularly when it comes to predicting the future, so I shouldn't feel so bad about it.

One thing that I don't get in particular is the inflation argument.

Paul Krugman, amongst others, has been arguing for some time that the US could do with more inflation.  He says:
First, about inflation obsession: For at least three years, right-wing economists, pundits and politicians have been warning that runaway inflation is just around the corner, and they keep being wrong.
And indeed, sites full of right wing economists such as Catallaxy have been taking about inflation as a major concern, both now and last year.   (Sinclair Davidson appeared on Andrew Bolt more than a year ago to warn of the risk of stagflation for Australia.  It hasn't come to pass, even with the carbon tax.)

To take it to even greater extremes, aging science fiction writer Jerry Pournelle's reaction to the re-election of Obama (which he really didn't see coming) has been to start talking about hyperinflation and the wisdom of people stocking non perishable food and following his old survivalist guides written during the 80's before the end of the Cold War!   He usefully notes:
Interesting times. They can be made a bit less interesting if one has a large stock of non-perishable food acquired quietly and without drawing attention. You do not want your neighbors to believe you are hoarding. Hoarding is evil. Being prepared means protecting yourself from having the reputation of being a hoarder.
 I see from this 2010 story, about a silly video warning of hyperinflation, as well as other right wing obsessions, that it is a favourite topic for goldbugs.

Again, I don't know much about goldbugs, except for the fact that Jonova and her husband David Evans are well and truly in that category.  Apart from being quasi professional climate change denialists, it seems to be how they make their living.  

So - the credibility connections here aren't looking good.

And given England's dismal economic recovery, which Krugman puts down to them not taking his Keynesian line, who am I to doubt him on this issue too?   (Actually, I suspect he is a bit too hard line in his own direction, but overall, seems to me he certainly has it over the right wing economists at the moment.) 

I don't think I am going to bother with the canned food hoarding just yet.

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