Gonzalo Lira vs Rick Ackerman: "Slicing Up" The Logic Behind The No-Hyperinflation Argument

Tyler Durden's picture

Submitted by Gonzalo Lira

Talk About A Big Gap In Logic!—Slicing Up Rick Ackerman

So Rick Ackerman posted a piece that I spotted on Zero Hedge—which surprised the hell out of me. Either Tyler and his gang of merry pranksters are losing their nerve about the downward trajectory they think the U.S. economy and monetary policy is headed in—or they ran the piece for shits and giggles.

Ackerman’s piece said, in effect, that dollar hyperinflation was
impossible. His post was titled “Big Gap in Logic Weakens Hyperinflation
Argument”.

I’ve got a rep for being a hyperinflationist—which isn’t exactly true:
I’m a dollar hyperinflationist, but a euro deflationist. A friend called
me an economic agnostic, which is pretty accurate (and kinda cool,
actually): I look at the data, look at the political realities
influencing macro-economics, look at the arguments, then make up my
mind, regardless of what the various sects of the religion known as
Economics deem orthodox.

I suppose my heterodoxy comes from my education: I was trained in
philosophy, with emphasis in epistemology (theories of knowledge),
Hegel’s political philosophy, and formal logic. That background makes
you not want to join a crowd—any crowd. And it makes you willing to
question even your most prized assumptions.

So when Ackerman said he had proof positive that hyperinflation in
America was impossible—that he had, as he claimed, found a “big gap in
logic”—I was like, “Cool: Show me.”

So Ackerman . . . well, he tries. In his piece, he writes:

Hyperinflation occurs when people,
fearing their money is about to become worthless, panic out of currency
and into physical goods. This is highly unlikely to happen in the U.S.
for several reasons, to wit: 1) Whereas Germany’s hyperinflation took
several years to ramp up, today’s financial markets are primed for a
catastrophic collapse that could conceivably run its course in a week,
if not mere hours; 2) under the circumstances, there would be no
shifting of financial assets into hard goods simply because any
financial assets one holds at the time of the collapse would become
worthless before one could sell them; and, 3) at that point, there would
be insufficient currency available to drive a hyperinflation, since
mattress money is likely to be scarce and because branch banks keep only
about $25,000-$50,000 in cash on hand. All of which implies we will go
straight to deflation without the emancipating, hyperinflationary
interlude that some mortgage debtors might be hoping for. 

Then Ackerman adds:

My argument is simple, and I will not yield ground to any
hyperinflationist who fails to explain, if the system collapses, where
the money will come from to bid tangible assets skyward. 

For
situations like this, never use a hatchet to chop somebody down—always
use a long, fine, sharp knife. After all, you don’t gut a fish with a
hatchet—you have to slice it up thin as a ribbon. And for that, you need
a long, fine, sharp knife . . .

To begin: Ackerman’s argument in the above paragraph looks like a valid argument—only it’s just not sound.

Sorry to get all philosophy geek-speak—let me quickly explain: The
classic deductive argument “All men are mortal, Socrates was a man,
therefore Socrates was mortal” is both a valid argument (in that the premises follow one another to the conclusion) and a sound argument (in that each of the premises is true, and therefore the conclusion is true).

But the argument “All toilets are television sets, all television sets
make you stupid, therefore using the toilet makes you stupid” is an
example of a valid argument that is unsound: The two premises lead to
the conclusion, even though all the statements are false. (FYI: An
unsound argument can arrive at a true conclusion. For instance, “All
parrots are a type of beaver, all beavers have wings, therefore all
parrots have wings.” Such an argument—though it arrives at a true
conclusion—is an unsound argument, and therefore fails.)

Ackerman’s “argument” is completely unsound: Once you begin to unpack it, it’s really quite obvious.

His very first sentence which he uses to set up his
argument—“Hyperinflation occurs when people, fearing their money is
about to become worthless, panic out of currency and into physical
goods.”—is actually more or less correct—but only insofar as the end
stages of hyperinflation are concerned. And this fleeing from the
currency is not the cause of hyperinflation—it’s merely an
effect, when the population as a whole has realized that the jig is up,
with regards the currency. 

The cause of hyperinflation is always the same:
Spiralling prices that cannot be reigned in with traditional monetary
policies of interest rate hikes. But Ackerman doesn’t see this: In his
piece, it’s clear he doesn’t realize hyperinflation is an effect of rising prices. Eventually people
realize the money itself is to blame—but only eventually, at the end.
That’s why Ackerman’s first sentence sort-of makes sense, but not
really.

But although Ackerman is partly right in the first sentence, his second
sentence? That it’s “highly unlikely that this will happen in the United
States”?

Brother, a panic in the dollar that leads people to exit it for
commodities has happened already—and not that long ago: In 1979-’80,
when inflation crossed the double digits but before Volcker slammed the
brakes via interest rate hikes, people were beginning to get out of the
dollar and into anything else, especially commodities, especially gold
and silver.

But be that as it may, Ackerman goes on with his “argument” and puts up
his first premise: “1) Whereas Germany’s hyperinflation took several
years to ramp up, today’s financial markets are primed for a
catastrophic collapse that could conceivably run its course in a week,
if not mere hours.”

The reference to Germany is of course the Weimar Republic. Ackerman has a
handy list included with his piece, showing the price of gold in German
marks from January 1919 to November 1923. Let me reproduce his list: 

Right away, his own chart betrays him: The charts that he cites says
that gold went from 170 marks per ounce in January 1919 to 499 marks in
September 1919—that’s a trebling of its price, a 200% rise in nine
months. Repeat after me: Triple in price in nine months. Then by
January 1920—a mere three months later—the price of gold had trebled yet
again. Weimar was able to hold off more hyper-i during 1920—call it a
pause in the moonshot—but by 1921 it was off to the ionosphere: Gone,
baby, gone.

“Several years”? By Ackerman’s own data, Weimar Germany’s slide into hyperinflation started the second the Great War ended.

(By the way, deflationistas always point solely to Weimar Germany, as if
it were the only country to have ever experienced hyperinflation. Or
rather, as if the Weimar experience is the only way by which
hyperinflation can happen. Very irritating. That’s like saying that
there is exactly one and only one route from Los Angeles to New York, a route that necessarily passes through Miami—patently untrue. But I digress.)

In Ackerman’s first “premise”, the Weimar reference is actually a
subordinate clause to the whopper he springs on us, the poor reader:
“[T]oday’s financial markets are primed for a catastrophic collapse that
could conceivably run its course in a week, if not mere hours.”

Who says this? How is this very wild conjecture—nay, this very wild guess—suddenly a statement of fact? Last I checked, in the Global Financial Crisis of 2008—the last real market panic—the fall took about six to eight weeks: And that was a full-on, the-world-is-ending—save-yourselves-now!
panic with a capital-P—a panic to put hair on your chest, especially as
that particular panic was outfitted with all the latest technological
trimmings of high-speed trading and various computer accesories. And it
still took about six weeks, from peak to trough (depending, of course,
on where you set the interim peak).

Ackerman boldly—and without a shred of proof or even a modicum of
evidence—claims that the “financial markets are primed for a
catastrophic collapse!” Okay, there was no exclamation mark in his
original piece—but there might as well been one. Such an inflamatory
premise begs at least some proof—some reasonable argumentation.

Alas, there is none. And since Ackerman’s entire argument rests on this particular . . . creative outburst if you will, then the rest of his argument pretty much goes out the window right here and now.

Even if we grant that Ackerman is somehow right about this baseless,
brazen claim, we have to ask the obvious: How is a market crash relevant
to hyperinflation? What—if stocks fall you can’t have hyperinflation,
or vice-versa? Because that is simply, empirically not true: I can point
to three separate cases of hyperinflation—Chile in ’73, Brazil in the
’90’s, Argentina in 2001—where the stock markets all collapsed, even as
hyperinflation was rampant. Ditto with real estate—here I explained how housing prices can collapse even in the midst of high- or hyperinflation.

That pretty much gives lie to Ackerman’s seemingly formidable paper-tiger premise one.

So let’s go on to his second premise—to quote: “2) under the
circumstances, there would be no shifting of financial assets into hard
goods simply because any financial assets one holds at the time of the
collapse would become worthless before one could sell them.”

Ackerman is supposed to be a trader—or at least someone who teaches
people how to trade. (Those who can’t do . . .) Anyway, as any trader
knows, no asset—be it stocks or bonds—suddenly has a valuation of zero.
It might well trade all the way down to zero—but it takes time, because
even if an asset is suddenly discounted by, say, 20%—rather, especially
when an asset is suddenly discounted by a big double-digit chunk—there
are always buyers who think that this drastic fall is a momentary panic,
and that the asset will rebound.

Great traders have met their ruin, chasing a market to the bottom.

By the way, practical experience shows that what Ackerman is positing
simply isn’t true: Even when a specific stock collapses—say because a
teetering company didn’t get FDA approval for some crucial drug, or
because a seemingly solid company was discovered grossly cooking its
books—there are always traders willing to take on the asset, even as it
slides all the way to zero. And that slide is never instantaneous—it
always takes time.

So premise 2? Fuhgedaboudit!

Finally, Ackerman hits us with this whopper: “3) at that point, there
would be insufficient currency available to drive a hyperinflation,
since mattress money is likely to be scarce and because branch banks
keep only about $25,000-$50,000 in cash on hand.”

My knife-hand is dithering: Where to begin to slice! Where to begin to slice! 

First off, to dispute an obvious error of fact: As anyone with even a
passing knowledge about commercial banking knows, most branches carry
$200K to $1 million in cash—and that’s the small branches. For crying
out loud, the lobby ATM carries a hundred G’s, easy.

Second, the amount of currency in circulation is not the issue, in a
hyperinflationary crisis: It’s how hot that cash becomes to its holders.

Thirdly—and most importantly—hyperinflation is a pricing issue: Prices are rising
in hyperinflation (obviously), so buyers have to find the cash to buy
what they need. If food for your family goes up from $1,000 a month to
$5,000 a month, by golly you’ll find the money somewhere—and if you have
to sell your $20,000 Harley Davidson for a paltry $2,000 in order to
get cash to buy groceries? Well, you’ll do it, of course: You can’t eat a
Harley, but you sure can starve to death.

Ackerman’s premise 3? Unsound.

So to recapitulate: Ackerman’s argument is: 1) There’s going to be a
sudden collapse of all financial markets, all of them happening
simultaneously and instantaneously. 2) The collapse will be so sudden
and complete that no one will have time to exit financial assets and
find safe haven in commodities or other hard assets. 3) There simply
won’t be enough money to make hyperinflation possible, because banks
don’t have that much cash.

Strictly speaking, of course, this isn’t an argument: This is just a
series of premises without a conclusion. The conclusion Ackerman does
posit in his post, as I quote above—“[W]e will go straight to deflation
without the emancipating, hyperinflationary interlude that some
mortgage debtors might be hoping for”—does not at all follow from these three premises: First of all, these three premises don’t argue for deflation—they just argue against hyperinflation. So the first part of his conclusion is invalid from the premises he presents.

And even if we allow for the weaker, implicit conclusion that Ackerman
is positing—“There will never be hyperinflation in America”—it’s not at
all clear that that follows from these three premises he presents.

Besides, these three premises are all incorrect, as I think I’ve shown.

Notice, by the way, that Ackerman doesn’t present an argument for
deflation: He just claims at the last minute, “No
hyperinflation—therefore deflation!” But that’s no argument—that’s
simply a false dichotomy that is demonstrably untrue. After all, you can
have an economy where there is neither deflation nor
hyperinflation—obviously. But Ackerman seems to think that “proving”
hyperinflation can’t happen is the very same thing as proving deflation will happen—which is of course nonsense.

I had the privilege and pleasure of arguing with Nicole “Stoneleigh” Foss about deflation. I didn’t agree with her, but at least she had an argument for her position. But Ackerman has none—and really doesn’t have an argument against hyperinflation either, as I think I’ve shown.

Ah, but Ackerman does throw down a gauntlet at the end of his
piece. He wrote, as I quoted above: “My argument is simple, and I will
not yield ground to any hyperinflationist who fails to explain, if the
system collapses, where the money will come from to bid tangible assets
skyward.”

Apart from the obvious fact that he presented no sound argument against hyperinflation—or even a valid argument—the
answer to his “challenge” is simple: The money will come from the
Federal Reserve by way of the Federal government.

In fact, the money is coming right now from the Federal Reserve to the wider economy, by way of the Federal government’s spending.

As I have shown elsewhere—and this isn’t controversial or anything
anyone seriously debates—the Fed is monetizing roughly 50% of the
Federal government’s FY 2011 deficit by way of QE-lite and QE-2. That’s roughly $100 billion a month that the Fed provides, $75 billion of which it is printing out of thin air.

The Federal government needs this money printing—as I’ve said
repeatedly, Washington is a junkie, and the Fed is its friendly
neighborhood dealer. Washington can’t afford to go off the horse—the
Federal government would go broke if it did. Broke as in bankrupt—broke as in full government shut-down. Broke as in no more money to pay for entitlements, the military, or regular government services.

Broke as in broke.

Think it through: If the Fed suddenly cut off it’s $100 billion monthly
purchases of Treasuries, where would the Federal government get its
funding? From China? They’re selling Treasuries and getting into
commodities. From Japan? They’ve got Fukushima to deal with. From
Europe? They’ve got Portugal on deck, Spain and Italy warming up.

There’s no one to buy the massive amounts of Treasuries the Federal
government needs to sell in order to fund its deficit. The Federal
Reserve is the Treasury Department’s buyer of last resort. Scratch
that—buyer of only resort.

That’s why QE-2 will never end, come June when it’s supposed to
end—it’ll just keep on going: The Bernank and the Fools at the Fed will
just keep on printing money, month after month, propping up a literally
bankrupt government, because they have no other choice.

This bankrupt government, of course, will spend this money—it’ll get
this paper from the Fed, and then go pump it out into the wider economy:
And this is how the Federal government will be helping to raise prices
across the whole economy. That $800 billion that the Fed is printing out
of thin air, and then ramming up the economy? That $800 billion of new
money—which is close to 6% of total GDP? That is what is bidding up stuff.

That is where the money is coming from right now. And that is how prices will rise—are rising right now.

And that is how I answer Ackerman’s “argument”, and his challenge: That is how we will get hyperinflation.

If you’re interested, you can check out my recorded presentation, “Hyperinflation in America”, where I discuss the specifics of how I think the dollar will crash. 

My!, but that was a delightful meal! Been a while since I had fish.

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I Am Ben's picture

Hyper-what now?

Hard1's picture

-All that glitters is not gold.

-Gold glitters

Therefore gold is not gold

(Is that a sound argument Gonzalo?)

CrockettAlmanac.com's picture

"All that glitters is not gold," means that not all glittering things are gold. It does not mean that nothing that glitters is gold as you seem to interpret the statement.

Hard1's picture

Dude... you seriously need to lighten up. I obvoulsly understand the sophism in my argument, you don't seem to understand something that us humans call a joke. Or did you really think that I just convinced myself through logical steps that something is not itself?  You can stop scanning the news and go back to trading Mr. Algo.

CrockettAlmanac.com's picture

Elaine - Well you don't have to dissect if you can just tell me why this is suppose to be funny?

Mr. Elinoff - Ha! It's merely a commentary on contemporary mores.

Elaine - But what is the comment.

Mr. Elinoff - It's a slice of life.

Elaine - No it isn't.

Mr. Elinoff - Pun?

Elaine - I don't think so.

Mr Elinoff - Vorshtein?

Elaine - That's not a word. You have no idea what this means do you?

Mr Elinoff - No.

 

http://www.youtube.com/watch?v=g_4M1Tz_SdM

Hard1's picture

(deleted double post)

sdmjake's picture

"In a social democracy with a fiat currency,
all roads lead to inflation."

 —Bill Fleckenstein

falak pema's picture

then to monetary over-dissipation which leads inevitably to deflation... as we saw with John Law...

Pladizow's picture

"There will come a time when a person who finds a penny in the street, wonders whether it was a dime when someone dropped it." - James Dines.

financeguru500's picture

You know what's funny?

Many people in the U.S. don't even realize how much control we have over things like the price of oil. If you even mention that people should consider being responsible about their personal fuel usage they quickly reply back how it's their God given right to use however much fuel they feel like using.

Consider this for a moment. If every driver in the U.S. could cut their gasoline usage by 1/3rd each day, we could cut U.S. oil consumption by 3 million barrels. That would be enough of a cut to start bringing the price of oil back down. Considering the U.S. consumes around 18-19 million barrels of oil each day and world oil production is around 80 million barrels per day 3 million barrels is a lot. Roughly 4% of world oil production. If every driver ocould cut fuel usage by half each day it would be roughly 4.5 million barrels or almost 6% of world oil production. Imagine if all the sudden there were an extra 4.5 million barrels of supply sitting around each day. That is a huge amount of oil and the price of oil would plummet. We could see $1.50 gasoline again.

The impact that the U.S. citizens have is tremendous. We are the largest consumer of oil in the world and we have the chance to change prices for ourselves. Rather than trying to hold politicians accountable we need to hold ourselves accountable. This bull crap about God given rights to consume as much as possible will result in unaffordable gas pretty soon.

I know no one will care about what I say and there is no way to change the U.S. citizens to think about things like this. But I just wanted to bring up that it is under our control and we can make a difference.

I Am Ben's picture

 

All is under control. Carry on.

DoChenRollingBearing's picture

FOFOA just picked apart Ackerman too at his latest post.

fofoa.blogspot.com

Heavy's picture

He did more than pick him apart, he wrote something highly educational which everyone reading this should read immediately.  I sent it to everyone I know as soon as I was halfway in.  Very to the point and a very sharp point at that.

Arthor Bearing's picture

You are entirely correct. I only reply to emphasize one thing you said, that it's time to stop trying to hold our politicians accountable. They're not accountable. We cannot count on political solutions, nor should they even be attempted at this point. It's up to us as individuals to try to structure our lives in a sustainable and responsible way. The politicians and most people will stand in our way for a long time but once they begin to understand how high the stakes are everyone will figure out ways to drive less (e.g. bring jobs back to local communities to end the commute) and consume less (backyard gardens in suburbs, for one thing). I'm gonna spoil the ending: good wins out over evil.

NotApplicable's picture

Amen! Politics (and political "solutions") are evil. The only solution for us (as individuals) is to stop feeding the beast with our support.

I'm going to unspoil your ending: there is no end, but rather a constant vigilance to be maintained (in the form of education) to ensure evil is not given free reign by becoming yet again empowered via an institution of control.

Freedom is the answer! Now what was the question?

Abitdodgie's picture

Every year in the western world 4-5 million drivers get of the road , however in the developing nations ,China, India, etc 40 million drivers take to the road per year , so it is of little consequence what the western world does now .

Flakmeister's picture

All fine and dandy.... price goes down and people say, hey I can drive more because it is cheaper...  Do you still write letters to Santa?

Arthor Bearing's picture

But once prices rise people will find ways to get along without it. I don't usually recommend drugs for people's problems but you might benefit from Valium

Flakmeister's picture

Naw... am partial to cannibis though.

We will see how America deals with $6 then $10 gas.... The kicker is that any demand destruction here is more than compensated by increased demand elsewhere. The US no longer drives global oil demand...

Arthor Bearing's picture

"partial to cannibus" that makes two of us mein freund 

Heavy's picture

You know what pitchforks are good for right?  (other than improving governance by improving governments) ...Pitching weed into the new American economy by the shovel full!  Selling pitchforks here!!!  (for silver)(not selling weed because the price is set to drop (relative to silver), can I somehow short weed...never mind that does not seem ethical...)

Pladizow's picture

Yeah, and IF my aunt had nuts she'd be my uncle.

Flakmeister's picture

If your uncle had that rack, I'd wish he were my mother...

Banjo's picture

I assume by "we" cut our consumption by 1/3rd each day, you mean "we" the people.

I would be intrested in breaking down how much oil is used by

  • Industry
  • Government including Military
  • Private i.e. "we" the people.

In the private section can you find the spectrum of people in the 20% that control 80% of the nations income and wealth and contrast their fuel consumption against the remainder of the population the 80% or roughly 240 million people that control 1/5th of the nations wealth.

Then run fuel and oil reduction numbers.

I am guessing that most of these lower income and asset holding American citizens take less vacations (especially involving airline travel) and they probably don't spend and extra 30% of fuel driving for the sake of driving after all you do have to get to work to pay the bills, I would guess they have less fuel consuming toys like, boats, jets, sports cars etc..

It would be an interesting data series to filter out and examine.

 

DoChenRollingBearing's picture

Yesterday here at ZH there was an article that had a pie chart showing that the bottom 80% held only 7% of the nation's wealth.

The top 1% held something 40% plus.

Anytime something like this that is so much more extreme than the ubiquitous 80 / 20 rule is a sign of trouble ahead.

Huskybritches's picture

How would one go about cutting fuel consumption by 1/3 if all you do is drive to and from work every day?  Would you park your car on the side of the road when you're 2/3 of the way to your destination?  Furthermore, how would one cut it by half?  Would you drive to work and walk home, then the next day walk to work and then drive home?

Manthong's picture

Hedge your bets.. Hyper-Stagflation.

Best protection is a diversified portfolio; Ag, Au and Pb.

DoChenRollingBearing's picture

+ $39

+ $1450

+ 9 mm

+ 7.56 x 39

HK's picture

I saw the chart yesterday and meant to comment.  Let's say those are dollars instead of marks.  In Jan 1921, gold was at $1349, similar to today.  Less than 3 years later, it was at $87 trillion dollars.  Imagine that, we'd all be rich!  (sarc/off)

 

Yes, I understand that the ounce of gold would buy a nice suit in either case, but can you even fathom the surrealness of that sort of situation?  I mean, what comes after a trillion, because 12 ounces would get you there.

Banjo's picture

The thing is if you have gold you have a "real" store of value.

You may or may not be rich it depends on what you can "exchange" it for.

There is the story of a German bellhop and this may be pure BS however it was crazy times and people were desperate.

http://www.gold-eagle.com/editorials_00/morgan120800.html

The combined money supply rose from 12 billion marks to 63 billion marks during the war. Prior to the hyperinflation of Weimar Germany a bellhop was given a gold coin as a tip. He saved this coin (Gersham's law) and continued about his business. During the worst of the hyperinflation this same bellhop bought the entire hotel at which he was once employed, for that same gold coin he had saved earlier.

goldsaver's picture

+ 7.56 x 39

DoChen... did you mean 7.62 x 39? Unless you are into some serious handloading and bullet casting.

disabledvet's picture

"Cats and dogs living together.  TOTAL CHAOS!  But you Lenny..you could be saving the lives of a MILLION REGISTERED VOTERS."

"Get that guy outta here."

Pladizow's picture

Wher u bin, Lira?

falak pema's picture

he can be excused...he's been looking at your boobs too long!

jswede's picture

you're.  so.  freaking.  wrong.

promise to come back here by the end of the year -- after all, you guaranteed hyperinflation in America by the end of 2011.

Popo's picture

I hope Lira likes the taste of crow.

MachoMan's picture

I asked him to make a falsifiable hypothesis and here she is:

http://www.zerohedge.com/article/guest-post-hyperinflation-part-ii-what-...

Methinks MushyMan has lain down the gauntlet? I doth think he has!

 

I already said what I think will happen, but I have no problem saying it again: A Treasury bust and subsequent run to commodities, sparking hyperinflation, before the end of 2011—but very possibly this coming Fall. 

 

See, I got balls and a big ol' cock-ring wider than a silver dollar, and have no problem showing them off. 

 

Any questions?

 

GL

 

pazmaker's picture

Thanks Machoman.  One must be accountable for their words.

goldsaver's picture

You do realize that there are 9 more months this year.... right? Claiming victory the first inning is not wise grasshopper

Metropolis_Minx's picture

Last time I looked, it was only April of 2011. Lira has months to be right or wrong.

LawsofPhysics's picture

This "flation" debate goes nowhere.  All that matters is buying power.  Some will have it and some won't.  It does not matter if we are talking about individuals or companies.  What is coming is beyond both inflation and deflation.

 

hedge accordingly.

Heavy's picture

Try taking out "buying"...in order to shorten to "power".  And, after some additional improvements, we have:

"The 'flation' debate only leads us to views of the void.  All that matters is power.  Some will have it some will not.  Individuals, corporations, bankers, IMF, BIS... all, in the end, are held in the firm grip of physics.  What is coming is beyond any of us.

Act accordingly..."

 

There...that should be pretty junk proof... :-)

In the long term, Power=Energy=Electric&Oil  Have a nice day.

lieutenantjohnchard's picture

not sure who is right. therefore i buy silver. thus all silver is right. or something like that.

hannah's picture

who cares if we have hyperinflation for a month and then a depression for 100 years....i call that a depression.....we cant have hyperinflation for a long period of time. oil goes to $200 and we crash into a depression.

i dont get what the arguement is...?

 

spiral_eyes's picture

you can very easily have a hyperinflationary depression. what counts is the quantity of money weighed against goods and productivity. keynes' dogma will keep the fed pumping and dumping through a depression to "raise aggregate demand".

hannah's picture

you didnt 'say anything'...? printing money doesnt raise demand...that is stupid. we have record suppies of oil yet oil is up in price because of speculation...not supply and demand. you cant bump up demand with money printing.