I was quoting from one of the many ‘sound money’ websites. It does make sense if you consider a demand-supply situation where prices increase due to shortage of required materials and products (& services). This can occur without any new money being introduced into the system.
Yes, but the term 'Inflation' has been altered over time. The original meaning for inflation is
the expansion of money and credit. Today people use it to mean changes in the CPI, RPI or General prices.
It can be one cause of inflation, yes, but it’s obviously not the only one.
Let me reiterate, increasing the supply of money doesn't cause inflation, it
is inflation. The consequence is rising prices. Modern economists have altered the meaning over time to mean Government calculated CPI numbers.
I have read this several times and am still at a loss to understand the logic. I’m sure it’s me that’s missing the point rather than you failing to make it, but which ‘certain’ goods are pivotal in determining whether increasing the money supply causes inflation?
It depends generally on who gets the new money first, but usually it is the Government. So, if the Government embarks on a new public works programme, like building a dam or a railway or super highway...or help to buy, the Government gets the new money which it then uses to bid up scarce resources, like cement, steel, labour etc. It takes longer to mine and refine a ton of steel than it does for a Central Bank to create £1 billion out of thin air. This is a very abbreviated example but I'm sure you get the gist.
Most technologically based industries (consumer electronics in your example) employ JIT to the Nth degree and are just, if not more susceptible to fluctuating demand and costs than agricultural of fuels industries.
Advances in computer technology and manufacturing techniques have evolved faster than new oil discoveries have been made. Again, an abbreviated example but I'm sure you get the gist. None of these advances and discoveries have been able to outpace the rate at which new money has been created by Government Central Banks.
I’m neither left wing nor an economist and don’t understand why you’ve chosen to use this term in a way that I consider to be pejorative. Can you provide data prior to 1912 – which is what I was looking at when I made that statement – that support your view?
I didn't mean to offend you, but it's usually left wing economists that use Government data to try and prove their point about how wonderful Government is.
As for Gold Standard and Gold Exchange Standard – they both set the price in dollar per weight of Gold. The only difference between them as far as I can tell being who is permitted to hold stocks of the physical metal. You presumably believe the difference is far more significant. In what way(s)?
No, a true precious metal standard defined the 'value' of a dollar by a specific weight of gold and silver.
Coinage act of 1792:
Dollars or Units DOLLARS OR UNITS--each to be of the value of
a Spanish milled dollar as the same is now
current, and to contain three hundred and
seventy-one grains and four sixteenth parts
of a grain of pure, or four hundred and
sixteen grains of standard silver.
This meant that the average person could transact using the metal by way of actual gold and silver coins. A gold exchange standard is different in that the average person had to use Government issued legal tender and only Central Banks could redeem them for gold. Holding real gold means you are protected from inflation, the Government would have to confiscate the coins (Like Roosevelt did in 1933 with Executive Order 6102 ) and melt them down to debase them. The Government doesn't need to do that with a gold exchange standard.
