Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Minyan Mailbag: Questions for Inflationists

By

PrintPRINT

Editor's Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interacrtive dialogue among the Minyanship. We share this next discussion with that very intent.


Prof. Reamer,

Here is one of my recent articles on deflation that triggered email responses from inflationists.

I am not holding my breath waiting for a response from Puplava...

Any thoughts?


Regards

Minyan Mike


MM-

Most gold bugs are also Austrians - they (rightly) hate the state and fiat currencies. They believe, falsely in my view - that ALL business cycles and error clustering by entrepreneurs are a function of fiat currency inflation. They lend no weight whatsoever to, say Kondratieff cycles (which are borne from a collective psychological cycle of optimism and pessimism) which show, empirically, that inflation and deflation have cycles in which one or the other dominate. That cycle is independent of the monetary system in place (that is not to say that it cannot be attenuated or exacerbated by that structural monetary system however).

Thus the reason the gold bugs/Austrians view inflation as inevitable is because they think the State drives inflation SOLELY. It is my contention that they do not: the underlying collective psychology of risk-taking or risk-aversion (see Kahneman and Tversky) drive the cycles and the monetary regime (pure fiat, semi-gold backed, pure gold backed, etc.) exacerbates whatever the underlying trend is (up if inflation, down if deflation).

We just happen to be entering a kondratieff winter where the deflationary forces are actually gathering steam. I suspect the Fed's actions will - in the end - exacerbate this deflationary trend as well...setting the SEEDS of eventual hyperinflation (the next Kondratieff cycle) but those seeds are not likely to be sown until the forces of deflation are fully vetted..

Prof. Reamer




No positions in stocks mentioned.

The informatio= n on this website solely reflects the analysis of or opinion about the perf= ormance of securities and financial markets by the writers whose articles a= ppear on the site. The views expressed by the writers are not necessarily t= he views of Minyanville Media, Inc. or members of its management. Nothing c= ontained on the website is intended to constitute a recommendation or advic= e addressed to an individual investor or category of investors to purchase,= sell or hold any security, or to take any action with respect to the prosp= ective movement of the securities markets or to solicit the purchase or sal= e of any security. Any investment decisions must be made by the reader eith= er individually or in consultation with his or her investment professional.= Minyanville writers and staff may trade or hold positions in securities th= at are discussed in articles appearing on the website. Writers of articles = are required to disclose whether they have a position in any stock or fund = discussed in an article, but are not permitted to disclose the size or dire= ction of the position. Nothing on this website is intended to solicit busin= ess of any kind for a writer's business or fund. Minyanville management= and staff as well as contributing writers will not respond to emails or ot= her communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.<= /p>

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE