This page has been archived and commenting is disabled.

Central Bankers: Inflation is God’s Work

Tyler Durden's picture


Submitted by Doug French via the Ludwig von Mises Institute of Canada,

Inflation is always somebody else’s fault. Ludwig von Mises called out finger pointing central bankers and politicians decades ago in his book, Economic Policy. “The most important thing to remember is that inflation is not an act of God, that inflation is not a catastrophe of the elements or a disease that comes like the plague. Inflation is a policy.”

In the fall of 2007, Gideon Gono blamed his country’s inflation rate of 4,500 percent on “the differences that Zimbabwe has had with its former colonial master, the UK,” and added, “we are busy laying the foundations for a serious deceleration programme.” Deceleration? A year later inflation was 231 million percent.

Money printing didn’t have anything to do with it according to the central banker. Droughts began to be more frequent in the 2000’s and Gono believed  ”there is a positive correlation between the drought and inflation.” Dry weather, he told New African magazine, has, “got a serious bearing on our inflation level.”

In Gono’s dilluded mind,inflation was about the weather, lack of support from other nations, and political sanctions. He had nothing to do with the hyperinflation in his country. “No other [central-bank] governor has had to deal with the kind of inflation levels that I deal with,” Gono told Newsweek. “[The people at] my bank [are] at the cutting edge of the country.”

These days in Argentina its not the weather and political sanctions causing prices to rise, its businesses engaging in commerce. President Cristina Fernández de Kirchner is urging her people to work “elbow-to-elbow” with her government to stop companies from looting the people with high prices. Two weeks ago the government devalued the peso by 20 percent but it is private businesses that are stealing from working people with price increases.

Posters of retail executives have been plastered around Buenos Aires. For instance, Wal-Mart Argentina’s president Horacio Barbeito has his mug on a poster with the caption, “Get to know them, these are the people who steal your salary.”

Kirchner’s cabinet chief Jorge Capitanich calls economists who point to government policies as inflation’s culprit “undercover agents.”  He implies that these economists are the tools of business. “Argentines should know that independent, objective economists don’t exist,” Capitanich claims. “I want to say emphatically that when unscrupulous businessmen raise prices it has absolutely nothing to do with macroeconomic variables.”

In 2012 the president of Argentina’s central bank, Yale-educated Mercedes Marcó del Pont, said in an interview, “it is totally false to say that printing more money generates inflation, price increases are generated by other phenomena like supply and external sector’s behaviour.”

So while its central bank prints, the Kirchner government has enlisted the citizenry to work undercover in the fight against rising prices. A free smartphone application is encouraging Argentines to be citizen-cops while they shop.

The app is a bigger hit than “Candy Crush” and “Instagram.” President Kirchner wants “people to feel empowered when they shop.” And, they do. “You can go checking the prices,” marveled Analia Becherini, who learned of the app on Twitter. “You don’t even have to make any phone calls. If you want to file a complaint, you can do it online, in real time.”

“Argentina’s government blames escalating inflation on speculators and greedy businesses,” reports Paul Byrne for the Associated Press, “and has pressured leading supermarket chains to keep selling more than 80 key products at fixed prices.”

However, businesses aren’t eager to lose money selling goods. Fernando Aguirre told Chris Martenson that with price inflation running rampant, “Lots of stores don’t want to be selling stuff until they get updated prices. Suppliers holding on, waiting to see how things go, which is something that we are familiar with because that happened back in 2001 when everything went down as we know it did.”

In his Peak Prosperity podcast with Aguirre, Martenson makes the ironic point that when governments print excessive amounts of money, goods disappear from store shelves. In a hyper-inflation the demand for money drops to zero as people buy whatever they can get their hands on. Inflation destroys the calculus of profit and loss, destroying business, and undoing the division of labor.

Aguirre reinforced Martenson’s point. Describing shelves as “halfway empty,” in Argentina he said,  “The government is always trying to muscle its way through these kind of problems, just trying to force companies to stock back products and such, but they just keep holding on. For example, gas has gone up 12% these last few days. And there is really nothing they can do about it. If they don’t increase prices, companies just are not willing to sell. It is a pretty tricky situation to be in.”

Tricky indeed.  “It would be a serious blunder to neglect the fact that inflation also generates forces which tend toward capital consumption,” Mises wrote in Human Action. “One of its consequences is that it falsifies economic calculation and accounting. It produces the phenomenon of illusory or apparent profits.”

Inflation is also rampant at the other end of South America.  Venezuela inflations is clocking in at 56 percent. Comparing the two countries, Leonardo Vera, a Caracas-based economist told the FT, “Argentina still has some ammunition to fight the current situation, while Venezuela is running out of bullets.”

Fast money growth has also led to shortages such as “newsprint to car parts and ceremonial wine to celebrate mass,” reports the FT.

Venezuelan president Nicolás Maduro is using the government’s heavy hand to introduce a law capping company profits at 30 percent. Heavy prison sentences await anyone found hoarding, overcharging, or “destabilising the economy.”  Hundreds of inspectors have been deployed to enforce the mandates.

The results will be predictable. “With every new control, the parallel, or black market, dollar will keep going up, and so will the price and scarcity of milk, oil, and toilet paper,” says Humberto García, an economist with the Central University of Venezuela.

Don’t expect the printing to stop any time soon. Central bankers believe they are doing God’s work. “To ensure that my people survive, I had to print money,” Gideon Gono told Newsweek. “I found myself doing extraordinary things that aren’t in the textbooks. Then the IMF asked the U.S. to please print money. The whole world is now practicing what they have been saying I should not. I decided that God had been on my side and had come to vindicate me.”

It seems disasters wrought by inflationary policies must be experienced again and again, as “Inflation is the true opium of the people,” Mises explained, “administered to them by anticapitalist governments.”

The practice of central banking is the same around the world. The only difference is in degree. Before he destroyed the Zimbabwean dollar Gono looked to America for inspiration. “Look at the bridges across the many rivers in New York and elsewhere,” Gono told New African, “and the other infrastructure in the country that were built with high budget deficits.”

The Zimbabwe, Argentina, and Venezuela inflations may seem to be something that happens to somebody else. But Mr. Aguirre makes a point when asked about 2001, when banks in Argentina, after a bank holiday, converted dollar accounts into the same number of pesos. A massive theft.

“Those banks that did that are the same banks that are found all over the world,” Aguirre says. “They are not like strange South American, Argentinean banks–they are the same banks. If they are willing to steal from people in one place, don’t be surprised if they are willing to do it in other places as well.”


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 02/21/2014 - 19:53 | 4463665 TeamDepends
TeamDepends's picture

No, loving you unconditionally is God's work.

Fri, 02/21/2014 - 20:01 | 4463689 Jumbotron
Jumbotron's picture

OMG !!!

They are going to burn down the whole world before it's all over with....just to save their vision of utopia.

Bending knee and bowing  3.....2.....1.....

Fri, 02/21/2014 - 20:04 | 4463694 Looney
Looney's picture

I am not a religious person (and I don't hide behind "I am spiritual"), but... don't people use the word GOD too fucking often? Bitchez! ;-)


Fri, 02/21/2014 - 20:06 | 4463705 The Vineyard
The Vineyard's picture

OK.  OK.  We get it.  America will soon go into hyper-inflation in spite of the deflationary pressures.  Blah, blah.  Bitches.

Fri, 02/21/2014 - 20:15 | 4463734 SafelyGraze
SafelyGraze's picture

“You can go checking the prices. If you want to file a complaint, you can do it online, in real time. Then the store is closed down and the store owner is put in jail. It's fantastic. Soon there will be no more stores, and selling will only be done by outlaws!"

as good as that sounds, it would be even *better* to have an app that would identify anyone who creates or adds value. 

that is the source of the problem, since it triggers a process leading to the sale of goods and services.

if all manufacturers/creators/valueAdders could be fined and incarcerated, the inflation problem would largely be eliminated.

mister keynes's stable boy


Fri, 02/21/2014 - 20:23 | 4463753 DoChenRollingBearing
DoChenRollingBearing's picture



Venezuela and Argentina.  Other than being Hispanic and in South America, what else do they have in common?


Do we see a pattern here?

Fri, 02/21/2014 - 20:26 | 4463766 knukles
knukles's picture

Balmy warm temperatures, sunny, fine white sandy beaches, idyllic ever so well endowed women running about in skimpy bikinis, high heels and way too much makeup, looking for fat drunken slovenly gringos to bed, friendly subservient males willing to tend gardens for pennies and abuse...

... such lovely loving people...

Fri, 02/21/2014 - 20:34 | 4463784 kaiserhoff
kaiserhoff's picture

Is it cheaper if we charter a plane for a mass gringo Spring Break?

How about one way tickets, amigo?

Fri, 02/21/2014 - 21:00 | 4463838 knukles
knukles's picture

Jesus, man.
I dunno if we'd make it back.

Tyler'd be getting ransom demands for our return and you know what'd happen then with the CIA involved and all
We'd be blamed for the Venesuvian Spring Thing...


It truly has the markings of one of those seemed like a good idea at the time moments

Fri, 02/21/2014 - 20:32 | 4463775 LetThemEatRand
LetThemEatRand's picture

Love you man, but Finland also has socialism and it's peachy if cold.  There's a lot more behind what is happening in those nations and it involves authoritarian rule to feed the very wide mouths of oligarchs.  Socialism is a tool designed to keep the masses fed while their nations' wealth is handed to the oligarchs.   And when the shit hits the fan, the oligarchs step in and tell the people they need to make do with less socialism because socialism was the problem.  Very clever, these guys.  Socialism is often mistaken for fascism, which is what is taking over the world.

Fri, 02/21/2014 - 20:42 | 4463797 DoChenRollingBearing
DoChenRollingBearing's picture

I guess my response would be to have you suggest to Maduro that he ask Finland how they do Socialism right...  He said he knows, but it appears not.

Or could it possibly be that corruption is less of an issue in Finland?  Corruption was the other thing in common with Venezuela and Argentina I should have thought of before posting.

Fri, 02/21/2014 - 20:48 | 4463808 LetThemEatRand
LetThemEatRand's picture

I personally see corruption as the biggest problem.   I'm no advocate of socialism in its true sense (workers own the means of production), but I do believe that a social safety net and reasonable labor/environmental regulation are beneficial to a functioning society.

Sat, 02/22/2014 - 00:11 | 4464290 StychoKiller
StychoKiller's picture

Sorry but that "social safety net" soon turns into economic Kudzu, strangling the productive!

Sun, 02/23/2014 - 07:53 | 4467492 MeelionDollerBogus
MeelionDollerBogus's picture

Workers are front-line & understand the nitty-gritty of every job they do & connect to.

Why SHOULDN'T they be owners of the means of production, if they can afford to be?

Seems odd NOT to support this. Even homesteading is the worker owning the means of production, only it's a person/family, rather than a larger collective unit. And when it's that, we call it capitalism. Real captialism & real socialism have more in common than anything else on Earth invented by man for religion, politics or war.

Fri, 02/21/2014 - 20:43 | 4463799 akak
akak's picture


Show me all the nefarious multinational corporate oligarchs who were supposedly responsible for Zimbabwe's breathtaking currency depreciation, or for Venezuela's or Argentina's current if milder currency depreciation.  Those were and are strictly home-grown affairs and you know it.

But hey, SOMEBODY has to pay when the socialists run out of other people's money.

Fri, 02/21/2014 - 20:55 | 4463812 LetThemEatRand
LetThemEatRand's picture

Zimbabwe was not socialist by any definition I know.  It was a classic Kingdom run to funnel money to the King who calls himself President.   The King called himself a socialist but he owned everything.  That's a dictatorship.

Fri, 02/21/2014 - 21:01 | 4463840 akak
akak's picture

You just described almost every self-identified "socialist" regime that has ever existed.

Fri, 02/21/2014 - 21:08 | 4463848 LetThemEatRand
LetThemEatRand's picture

"Self-identified" is the key.   I don't think there's an example on earth of an actual, true socialist society.   Probably because it wouldn't work.  But telling people what they want to hear and doing the opposite to enrich oneself works quite well.   And I should add that I'm guilty as in posts above of using the term "socialism" incorrectly, because it is so commonly (and incorrectly) equated with any system that involves a social safety net and wealth distribution system that does not funnel everything to the top.

Sat, 02/22/2014 - 00:12 | 4464295 StychoKiller
StychoKiller's picture

"They talk like Marxists,

Rule like Stalin and

Live like Rockefellers --

While the poor suffer!"

Sun, 02/23/2014 - 07:51 | 4467488 MeelionDollerBogus
MeelionDollerBogus's picture

except Finland, Norway, Canada...

Fri, 02/21/2014 - 21:07 | 4463854 Anusocracy
Anusocracy's picture

Any form of government technically 'owns everything'.

Including the people.

Reality is a nasty little bitch.

Fri, 02/21/2014 - 21:10 | 4463855 LetThemEatRand
LetThemEatRand's picture

I would argue that the U.S. in its earlier stages is an example to the contrary, but I agree it devolved into that.  I just don't see a good, viable alternative to the earlier U.S. concept.  I realize that you do, but I think a true free market would just be more of the same without elections.

Fri, 02/21/2014 - 21:59 | 4463969 FilthyPhil37
FilthyPhil37's picture

America taxes you regardless of where you work. It truly owns its citizens. 

Fri, 02/21/2014 - 21:15 | 4463868 nmewn
nmewn's picture

You do realize Finland confiscates around 50% of a persons salary at only 100k right?

Sun, 02/23/2014 - 07:49 | 4467486 MeelionDollerBogus
MeelionDollerBogus's picture

You do realize the value returned from the taxes is probably 1000x more than what's returned from "capitalist" nations, right?

Real healthcare, real infrastructure, real peace in the streets, no racial-violence insanity or prison-industrial complex.

It's called real freedom, where people are happy, free & would gladly keep it that way without the threat of violence.

Fri, 02/21/2014 - 20:46 | 4463803 Boxed Merlot
Boxed Merlot's picture

what else do they have in common?...




Sat, 02/22/2014 - 00:14 | 4464300 StychoKiller
StychoKiller's picture

I keep hearing the Pope(s) espousing communistic ideas (all the while enjoying the gilded digs in the Vatican)...

Fri, 02/21/2014 - 21:21 | 4463883 Ban KKiller
Ban KKiller's picture

AKA, central control, no free market just like us!

Sun, 02/23/2014 - 07:47 | 4467484 MeelionDollerBogus
MeelionDollerBogus's picture

no, they have dictatorial powers, anti-socialism.

The people must collectively own the means of production to be socialism & being able to voluntarily opt-in or opt-out is permissible as socialism, though not strictly required either.

In these countries the people do not collectively own the means of production: not socialism.

Fri, 02/21/2014 - 20:24 | 4463756 knukles
knukles's picture

Of course Inflation is Not God's Work!
In Our Modern Secular World, there is no God but The State

Thus by Simple Syllogistic Logic, Nothing Can Be God's Work, For it is All And Everywhere, the State.

So it must be them fucking speculators... Quick a distraction... Get the speculators... Quick, raise the taxes on the middle class.. Quick a distraction... Hegelian Dialectic time... Calling Eddie Bernays, Eddie Bernays to the Teleprompter...

Fri, 02/21/2014 - 20:38 | 4463786 Looney
Looney's picture


Terry Bradshaw

P.S. That was NOT the scene from The Groundhog Day ;-)

Sat, 02/22/2014 - 11:16 | 4464846 Unknown User
Unknown User's picture

Actually... The Weimar financial crisis began with the crushing reparations payments imposed at the Treaty of Versailles. Hjalmar Schacht, who was currency commissioner for the Republic, wrote in his 1967 book The Magic of Money that it was the privately-owned Reichsbank, not the German government that was pumping new currency into the economy. What drove the wartime inflation into hyperinflation, said Schacht, was speculation by foreign investors, who would sell the mark short, betting on its decreasing value.  Speculation in the German mark was made possible because the recently privatized Reichsbank made massive amounts of currency available for borrowing, marks that were created on demand and lent at a profitable interest to the bank.

Fri, 02/21/2014 - 20:22 | 4463751 PT
PT's picture

Don't homocidal maniacs also claim to do "God's work"?

Fri, 02/21/2014 - 20:31 | 4463776 knukles
knukles's picture

<-- Homocidal
<-- Homicidal

Fri, 02/21/2014 - 20:41 | 4463794 Looney
Looney's picture

<-- Homoracial

<-- Heteroracial

Loo(Knukles rocks!!!)ney   ;-)

Fri, 02/21/2014 - 21:12 | 4463861 PT
PT's picture

Hummus side order???

Gee, I really hate it when I make spelling errors.

Fri, 02/21/2014 - 21:32 | 4463911 PT
PT's picture

Hummus sidle?

Hummers' Idol?
Home of (Billy) Idol?
Homer's idle? 

Fri, 02/21/2014 - 20:10 | 4463718 max2205
max2205's picture

Printing is it?

Sat, 02/22/2014 - 06:30 | 4464632 limit_less
limit_less's picture

Central bankers are god therefore inflation is god's work. Elementary.

Fri, 02/21/2014 - 19:59 | 4463678 Soul Glow
Soul Glow's picture

Inflation is the policy.

Fri, 02/21/2014 - 19:59 | 4463681 TrustWho
TrustWho's picture

Paul Volcker created a credibility image as head of The Fed fighting inflation. Through Paul Volcker, the US government would protect the value of the USA dollar. I am sure you agree with me this credibility image has been shredded with holes, but disagree on the degree of the shredding.

The President and Congress has appointed a small grey-haired female to head The Fed who has a physical image directly opposite the image of Paul Volcker--a tall, deep voiced, energetic, bald-headed, kick-ass, intelligent, alpha male. I hope The Fed Board can still appreciate the importance image plays in your financial game, but realize you might be unable to do this even in private. 

Ms. Yellen is forced to over-play the strong image to demonstrate the resolve that her image harms. Personally, I thought she failed in her first congressional hearing and appeared to be a "deer doe frozen in the headlights". If The Fed does NOT stop QE printing, Ms. Yellen's reign will be cooked in my humble opinion. 

Here is a suggestion. One of The Fed Board members, Mr. Fisher would be my choice, should write a novel on a hyper-inflation moment in history from the perspective "How do you stop doing the printing when you know the printing is feeding the monster". Since you are now walking in their shoes, Fisher would have great insight. There will NEVER be a perfect moment to stop. How does one stop when the risk of calamity is above zero? Oh the complex web we weave!

Sat, 02/22/2014 - 00:18 | 4464304 StychoKiller
StychoKiller's picture

You never woulda been elected to Earthican president if you hadn't stolen that killbot's body!

Fri, 02/21/2014 - 20:00 | 4463688 Kirk2NCC1701
Kirk2NCC1701's picture

Inflation is Devil's work.  Deflation is God's work.

Fri, 02/21/2014 - 20:05 | 4463692 Jumbotron
Jumbotron's picture


Jesus said to them, "Be on your guard and beware the yeast of the Parisees and the Sadducees."

Fri, 02/21/2014 - 20:36 | 4463770 knukles
knukles's picture

I knew two sisters form Paris who had yeast problems....
.... damn

Fri, 02/21/2014 - 20:52 | 4463817 Jumbotron
Jumbotron's picture



Sat, 02/22/2014 - 00:19 | 4464307 Hulk
Hulk's picture

but they could make one hell of a sourdough !!!

Sat, 02/22/2014 - 00:41 | 4464349 Jumbotron
Jumbotron's picture

Even MOAR TMI....Hulk.   LOL.....uurrrk....raallllllllph  !!!!!     oooo....sorry.

Fri, 02/21/2014 - 20:29 | 4463773 disabledvet
disabledvet's picture

agreed. "inflation has a thousand fathers...deflation only one."
Denial aint' just river either.

Sat, 02/22/2014 - 06:35 | 4464633 limit_less
limit_less's picture

Amen to that. Deflation is god's way of allowing everyone to benefit from human progress.

Fri, 02/21/2014 - 20:07 | 4463711 q99x2
q99x2's picture

The disease of money printing is so rampant that even Max Keiser caught it and is now printing the Maxcoin in an amount of 250 million coins.

The world has gone bananas.

Fri, 02/21/2014 - 20:12 | 4463728 Skateboarder
Skateboarder's picture

If I had a Bitcoin for every gay new virtual cryptocurrency that popped up, I would have more Bitcoins than they would let me cash out.

Fri, 02/21/2014 - 20:37 | 4463790 knukles
knukles's picture

Well, somebody would have more Bitcoins than they'd...

Fri, 02/21/2014 - 20:18 | 4463714 Kirk2NCC1701
Kirk2NCC1701's picture

When you have the GRC (Global Reserve Currency), you can print till the cows come home, as you are EXPORTING Inflation to the rest of the planet that is forced to use your confetti currency.  Read Currency Wars sometime.

The world would love to ditch the USD (petro-dollar), but while the Fed speaks softly, the DOD, CIA and NSA trio* are carrying the Big Stick.

* Yes, I know that the NSA is under the DoD.

If Argentina, Venezuela, etc were in bed with Wall St, they'd still get screwed, but it'd be nice and gentle.  As it is, they are getting screwed 'involuntarily' and roughly by the Three Amigos.  At the same time. 

No doubt financial and economic rape is also the victim's fault, right?

Sat, 02/22/2014 - 00:20 | 4464309 StychoKiller
StychoKiller's picture

They pushed the Ctrl-P, so they had it coming!

Fri, 02/21/2014 - 20:08 | 4463715 kchrisc
kchrisc's picture

I printed the money, but I didn't shoot no prices.

Fri, 02/21/2014 - 20:12 | 4463729 i_call_you_my_base
i_call_you_my_base's picture

After nearly every bubble in history, inflation is the chosen path. Nearly every one. It's the solution from the people who got all of the money in the bubble. Everyone pays for the elite's gain.

Fri, 02/21/2014 - 20:33 | 4463780 NoDebt
NoDebt's picture

Because what's left over after every bubble is the DEBT.  Debt you no longer have the ability to pay off in the traditional sense, and debt which creditors are, obviously, unwilling to take a hit on.  Inflation is the path of least resistance, so that's the path that is inevitably chosen.

Fri, 02/21/2014 - 20:19 | 4463747 kchrisc
kchrisc's picture

The first thing that is actually stolen by ‘printing’ (stealing) are the productivity gains in an economy. A typical economy will show prices decreases do to productivity gains. If the banksters are 'printing' (stealing) at about the same rate, prices will stay about the same with the banksters stealing and consuming the productivity gains. That's why they like to talk about "price stability," as in no price changes. That way they can quietly steal with little evidence of the crime showing up in the sheeple's wallets.


"A guilltoine and a basket walk into a bank..."

Fri, 02/21/2014 - 21:28 | 4463890 layman_please
layman_please's picture

good observation. indeed, it has to be coordinated effort by all the major central banks to conceal inflation but eventually the weakest link will give in. emerging markets are the valves that are showing signs of leakage. only gauge left is gold but its market is completely rigged.

Fri, 02/21/2014 - 20:46 | 4463805 akak
akak's picture

Obviously inflation is God's work.

Now we just have to decide which god we are talking about ...

Fri, 02/21/2014 - 20:50 | 4463807 AUD
AUD's picture

Actually, it was the crushing financial sanctions which drove hyperinflation in Zimbabwe. The $US is junk too, as is the British Pound, is there hyperinflation in these obligations?

Why do you think the US & its buddies are so keen to apply sanctions? They know exactly the economic, thus social, havoc it reeks on the targeted nation.

So there is in fact some truth in Gono's inflation rate of 4,500 percent on “the differences that Zimbabwe has had with its former colonial master, the UK”.

Fri, 02/21/2014 - 21:37 | 4463850 akak
akak's picture

Funny how much more onerous international sanctions never led to any meaningfully high rates of currency depreciation in neighboring white-ruled (and far less socialist) South Africa.  Just a coincidence, I'm sure.

Fri, 02/21/2014 - 22:17 | 4464020 AUD
AUD's picture

Not funny how you don't know what the fuck you are talking about. There were no financial sanctions applied to South Africa through London, not while Thatcher was in charge anyway.

Furthermore, if you knew what the fuck you were talking about, you'd know high inflation has been a problem in South Africa for many years. Your standard of measure ie. meaningfully, is worthless.


Fri, 02/21/2014 - 22:41 | 4464064 akak
akak's picture

You are simply talking out of your ass, and/or are too young to remember the sanctions against South Africa and its general economic situation in the 1980s and early 1990s.

I was IN South Africa in the middle 1980s, and the lack of many consumer goods due to the sanctions was quite evident, even to the casual visitor.  Oh, and the Rand was worth roughly $0.50 US, and even today has only sunk to around 11 to the US dollar, far from the exponential rates of inflation since experienced by most of its more socialistically-inclined neighboring nations (Botswana excepted).

Fri, 02/21/2014 - 21:04 | 4463852 SweetDoug
SweetDoug's picture





Hey Tyler!


Can we have a little article on this?


The Zimbabwe, Argentina, and Venezuela inflations may seem to be something that happens to somebody else. But Mr. Aguirre makes a point when asked about 2001, when banks in Argentina, after a bank holiday, converted dollar accounts into the same number of pesos. A massive theft.


I'd like to see the bastards outted!


Fri, 02/21/2014 - 22:04 | 4463980 DerdyBulls
DerdyBulls's picture

You know what I don't get after reading the sentiments here is that all economic schools are mystified by the error of their economic forecasts, especially Austrians. Someone pointed out to me recently that the money stock M1 expansion has mirrored bank reserve increases parked at the FED tit for tat. M1V is diminishing. Could someone explain to me, big picture, how inflation occurs beyond a modest pace if the digits aren't lent into the general economy by commercial bankers. This appears to be the wholesale nationalization of the capital markets instead of lending newly created money which results, well, in inflation.

Sat, 02/22/2014 - 11:40 | 4464932 Vooter
Vooter's picture

"Could someone explain to me, big picture, how inflation occurs beyond a modest pace if the digits aren't lent into the general economy by commercial bankers."

Well, you have to ask yourself: Why are those digits "parked" at the Fed in the first place? And what would happen if they were removed from their "parking space" at the Fed? Those digits were created for a reason. Why are they there? Those digits are allowing the Fed and the banks to do something that they wouldn't be able to do if those digits weren't parked there. What is that something?

Sat, 02/22/2014 - 22:45 | 4466944 DerdyBulls
DerdyBulls's picture

Lend to the generl economy.

BUT, they are not. 90% reserves parked for 25 basis points. The FED buys MBS and treasuries to fund the deficit. 1 percenters aren't going to drive inflation. The velocity of lending to the general economy to private business for expansion will drive inflation. Are you saying government spending by itself causes mass inflation? If so, why don't we have it now?  

Sun, 02/23/2014 - 07:10 | 4467462 MeelionDollerBogus
MeelionDollerBogus's picture

NO, that's the cover story.

The REAL truth is to increase bonuses & to permit rapid theft. ONCE the theft & bonuses happen, the money IS MOVED and it's over. No one but NO ONE creates new monetary digits to be parked for no reason at all. The ONE PURPOSE is to spend it & NEVER to do so as they CLAIM they will do so, before the act has happened.

What will drive massive inflation is that core regions of land, sources of energy & sources of food will be wholesale owned by those printing money & everyone else will be told "pay 10000x the price yesterday, or die where you stand"

Just like that.

Sat, 02/22/2014 - 03:48 | 4464553 TheCosmicTaco
TheCosmicTaco's picture

It's all the fault of the steeeeeinking greeeeeeeingos, everything is the fault of the steeeeeeeeinking greeeeeingos, even my madre-in-law's fat ass is the fault of the steeeeeeinking greeeeeingos.... greeeeeingos, you steeeeink. All of you.

Sat, 02/22/2014 - 08:43 | 4464691 no more banksters
no more banksters's picture

"Banksters : First: if more money were going to the market, then they would lose much of their value and we would lose profits because we are the ones who print money! That's why we invented inflation, to keep governments in fear and directing money back to us through the so-called Quantitative Easing Policies."

Sat, 02/22/2014 - 15:11 | 4465711 MagicMoney
MagicMoney's picture

That's politics for you in general. If the facts don't make your look favorable, deflect, or blame others. If the facts make you look favorable, then sure you would embrace those facts. Central bankers are politicians simply with ability to create, and issue money. They will always blame other people for their own doings. Same old trick that has been for many centuries. Then we get scapegoat theories, and deflections like "well they just got to greedy", or "they are all in a conspiracy in doing this." It's always somebody else's fault.

Sat, 02/22/2014 - 15:11 | 4465712 MagicMoney
MagicMoney's picture

That's politics for you in general. If the facts don't make your look favorable, deflect, or blame others. If the facts make you look favorable, then sure you would embrace those facts. Central bankers are politicians simply with ability to create, and issue money. They will always blame other people for their own doings. Same old trick that has been for many centuries. Then we get scapegoat theories, and deflections like "well they just got to greedy", or "they are all in a conspiracy in doing this." It's always somebody else's fault.

Do NOT follow this link or you will be banned from the site!