Inflation

[Fransisco]

On malleefarmer's posting on how long the wheat bull will last things got pulled off that topic and onto a different one, inflation.

I'm starting a new thread for anyone who wants to discuss it further so mallee's can get back to wheat.

[Fransisco]

Seems there are some difference's of opinion when it comes to inflation and prices and what causes what.

Here is what mine is based on.

<blockquote>The subject matter of inflation is the debasement of money. For instance, historically inflation originated when a ruler would force the citizens to give him all the gold coins under the pretext that a new gold coin was going to replace the old one. In the process, the king would falsify the content of the gold coins by mixing it with some other metal and return to the citizens diluted gold coins. On account of the dilution of the gold coins, the ruler could now mint a greater amount of coins for his own use. (He could now divert real resources to himself). In short, what was now passing as a pure gold coin was in fact a diluted gold coin. The expansion in the diluted coins that masquerade as pure gold coins is what inflation is all about. As a result of inflation, the ruler could engage in an exchange of nothing for something.

Under the gold standard, the technique of abusing the medium of the exchange became much more advanced through the issuance of paper money unbacked by gold. Inflation therefore means here an increase in the amount of paper receipts that are not backed by gold yet masquerade as true representatives of money proper, gold. Again the holder of unbacked money can now engage in an exchange of nothing for something.

In the modern world the money proper is no longer gold but rather paper money hence inflation in this case is purely the increase in the stock of paper money. Please note we don't say as monetarists are saying that the increase in the money supply causes inflation. What we are saying is that inflation is the increase in the money supply.

Once it is established that the subject matter of inflation is the expansion of the money stock, we can attempt to ascertain whether the Fed is an inflation fighter. </blockquote>

You can read the rest here

http://www.mises.org/story/2525

[Fransisco]

BennyHin posted Aug 25, 2007 21:58
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Well there goes LIBERTARIAN Franny blaming the government for everything... this time inflation.
Hey Franny: the government isnt forcing you to buy a $50,000 pick up truck.

http://www.libertarian.ca/

[Fransisco]

And as long as Benni's playing guilt by association...

http://www.google.com/search?sourceid=navclient&ie=UTF-8&rls=GGLR,GGLR:2006-01,GGLR:en&q=canadian wheat board site:cpcml%2eca

I'll take a Libertarian over a Marxist-Leninist any day of the week thank-you very much.

[Fransisco]

But to get to his point on the truck, if I do decide that I want to buy a pick-up worth $50,000.00 today the government has played a part in the amount of money I have to pay.

from the same article

<blockquote>While a general rise in prices may be associated with inflation, it is however not inflation. What is the price of a good?
It is the amount of money asked per unit of a good.

Now, if for a given stock of goods an increase in the money supply occurs, this would mean that more money is going to be exchanged for a given stock of goods. Obviously then the purchasing power of money is going to fall, i.e., the prices of goods are going to increase (more money per unit of a good). In short, in this case inflation is associated with the general increase in prices.</blockquote>

If the government hadn't previously inflated the money supply(which it has done many times)that same truck would cost less money.

Does anybody remember 10 cent fries at McDonalds, a bottle of Coke for a nickel? Has the true cost of these really increased that much over time?

[Fransisco]

Which incidentally is why economists sometimes like to use what is called 'purchasing power parity' when comparing things from one country to another. An easy way of doing this is what is called the 'Big Mac' index, how much local currency does it take to buy a Big Mac in say Mexico, Germany, and Hong Kong.

<blockqoute>Purchasing Power Parity (PPP) A method of calculating exchange rates that attempts to value currencies at rates such that each currency will buy an equal basket of goods.</blockquote>

[cottonpicken]

Hey fran you actually figured something out.But you havent even touched the tip of the iceberg.

Maybe you would like to change your "supply and demand determine the price of wheat" statement.



How come you decided to respect malle farmers thread and not agstars on harvest?

[Fransisco]

Malle doesn't steal my grain and then pretend that he's just a 'regular' farmer like everyone else.

[Fransisco]

I suppose it might be more appropriate to say that supply and demand determine the actual value of grain.

[wilagro]

Fransisco: ANY article put out by mises.org should be regarded with suspicion. MOST of them are CRAP.

It would be better had you studied about inflation for about ten years before writing any critique of same. That way, you wouldn't come across as a rank amateur.

[Fransisco]

Poor willy, he doesn't have the intellectual firepower to understand or refute the arguments so it's back to innuendo and name calling.

[agstar77]

Unfortunately for you ,I am just a regular farmer. I don't know where you get your info and I don't care ,but accusing me of stealing your grain is pretty much slander. I am surprised the overseers of this site allow you to make such statements.

[Fransisco]

Tell you what agstar you go to the next BOD meeting put forth a motion to make the CWB voluntary, vote in favour of the motion, and I'll retract the statement.

[Fransisco]

Upon further reflection, while it is true that I believe that agstar is one of the CWB BOD I have no evidence of this, that I wish to present at this time. If others do please feel free.

So until that time I should not treat him as such.

However agstar has been a long and loud advocate of the single desk. As such its not too much of a stretch to say that he vote's in favour of single desk directors. Who are the ones who refuse to acknowledge my right to sell my own grain.

They -take it- without my permission and sell it on my behalf. Taking something that belongs to someone else without their consent is theft.

So you see agstar even if you are just a 'regular farmer' you are complicit in all of this. It is people like you who make this denial of my rights, which is costing me tens of thousands of dollars a year, possible.

Mallee, to answer Cotton's question again, is in a completely different category than this

[agstar77]

For my part I believe you are one of the people complicit in the attempted destruction of the CWB , which has caused a loss of income to me as well as a serious rift between farmers, who should be working together instead of figthing amongst ourselves. If I were on the B.O.D. I would proudly own up to it!