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| from my knowledge inflation is caused by too much money chasing fewer goods. |
there's three types of inflation: demand-pull, cost-push, built-in.. they all have different causes although the end is the same..
if the dollar inflates faster than prices, then the net effect is deflation. if the dollar deflates faster than the fall of prices, you get inflation. if the dollar inflates along with prices, then the net effect is nothing. etc...
the whole thing about currency inflation is rather academic.. since the world's economies have filled their reserves with dollars, they're sharing this "inflation".. it's spread wide across the world so much that the risk of some sort of currency collapse is extremely unlikely.
what's of primary concern is managing our current account deficit and national debt. both would be corrected if we simply balanced the budget and began paying down the debt. there is simply no need to go the impossible route and reinstate the gold standard.
for those who suggest that we ought to return to gold, i'd be interested in seeing an explanation of
how we would be able to accomplish that goal. i've studied that myself and i've found it to be damn near impossible. (we could never cover all our foreign assets with gold - that was the whole reason why nixon floated the dollar)
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Did you know that for the last two years we have been fighting deflation?
Has Alan Greenspan got deflation licked for the time being? I dont think so... |
i don't think so either... check this thread.. we had a lengthy discussion about that.
http://www.volconvo.com/forums/index.php?showtopic=2635