CanuckClown Posted August 4, 2013 Share Posted August 4, 2013 Inflation is an increase in the supply of currency. http://en.wikipedia.org/wiki/Monetary_inflation Deflation is the decrease in the supply of currency. Velocity of money is the rate at which currency changes hands. Hoarding cash/currency/dollars is not deflation, rather it is the velocity of money decreasing. Inflation/deflation happens at the central bank level. Link to comment Share on other sites More sharing options...
CanuckClown Posted August 4, 2013 Share Posted August 4, 2013 Inflation is an increase in the supply of currency. http://en.wikipedia.org/wiki/Monetary_inflation Deflation is the decrease in the supply of currency. Velocity of money is the rate at which currency changes hands. Hoarding cash/currency/dollars is not deflation, rather it is the velocity of money decreasing. Inflation/deflation happens at the central bank level. Link to comment Share on other sites More sharing options...
CanuckClown Posted August 4, 2013 Share Posted August 4, 2013 Inflation is an increase in the supply of currency. http://en.wikipedia.org/wiki/Monetary_inflation Deflation is the decrease in the supply of currency. Velocity of money is the rate at which currency changes hands. Hoarding cash/currency/dollars is not deflation, rather it is the velocity of money decreasing. Inflation/deflation happens at the central bank level. Link to comment Share on other sites More sharing options...
CanuckClown Posted August 4, 2013 Share Posted August 4, 2013 Inflation is an increase in the supply of currency. http://en.wikipedia.org/wiki/Monetary_inflation Deflation is the decrease in the supply of currency. Velocity of money is the rate at which currency changes hands. Hoarding cash/currency/dollars is not deflation, rather it is the velocity of money decreasing. Inflation/deflation happens at the central bank level. Link to comment Share on other sites More sharing options...
Lancaster Posted August 4, 2013 Share Posted August 4, 2013 What? Keynes would roll over in his grave right now... Our system is nothing like Keynesian economics IMO. Link to comment Share on other sites More sharing options...
CanuckClown Posted August 4, 2013 Share Posted August 4, 2013 I'm not gonna deny they have skewed Keynes' theory, but it's his underlying fundamental policy that has been abused by bureaucrats. The idea that you can print you way out of a recession. Never worked in the past and it's not working now. Of course, I follow the Austrian school of economics. Link to comment Share on other sites More sharing options...
CanuckClown Posted August 4, 2013 Share Posted August 4, 2013 The irony of course is that Keynes and Hayek were very good friends in real life. Link to comment Share on other sites More sharing options...
mdehaan Posted August 4, 2013 Share Posted August 4, 2013 Sorry, but you're wrong. If you'd like to read more about the velocity of capital I suggest you read David Harvey's "Limits of Capital". Cheers. Link to comment Share on other sites More sharing options...
CanuckClown Posted August 4, 2013 Share Posted August 4, 2013 Currency not capital. Can you elaborate? Link to comment Share on other sites More sharing options...
CB007 Posted August 4, 2013 Share Posted August 4, 2013 Velocity of money is the rate at which currency changes hands. Hoarding cash/currency/dollars is not deflation, rather it is the velocity of money decreasing. Inflation/deflation happens at the central bank level. Link to comment Share on other sites More sharing options...
CB007 Posted August 4, 2013 Share Posted August 4, 2013 Capital is merely currency reinvested for a profit - the motor of the capitalist system. I agree that central banks play a role in guiding our economy, but it does not dictate deflation and/or inflation. That is done at different scales, as illustrated by earlier discussions. Edit: to elaborate, the BOC can not tell a bank what to set their interest rate at: they operate under the assumption of moral suasion. They set interest rates at a price they believe to be best for our economy, and the banks follow. Link to comment Share on other sites More sharing options...
CB007 Posted August 4, 2013 Share Posted August 4, 2013 I'm not gonna deny they have skewed Keynes' theory, but it's his underlying fundamental policy that has been abused by bureaucrats. The idea that you can print you way out of a recession. Never worked in the past and it's not working now. Of course, I follow the Austrian school of economics. Link to comment Share on other sites More sharing options...
CanuckClown Posted August 4, 2013 Share Posted August 4, 2013 Worked for the Great Depression. Massive government spending for WW2 brought the US out of the depression. Left them with massive debt of course. PS I follow the Wikipedia School of Economics. I take no sides. Link to comment Share on other sites More sharing options...
D-Money Posted August 4, 2013 Share Posted August 4, 2013 Both. Every economic boom is, to some degree, a bubble. Link to comment Share on other sites More sharing options...
Ghostsof1915 Posted August 4, 2013 Share Posted August 4, 2013 Link to comment Share on other sites More sharing options...
CanuckClown Posted August 4, 2013 Share Posted August 4, 2013 Link to comment Share on other sites More sharing options...
CB007 Posted August 4, 2013 Share Posted August 4, 2013 Inflation is an increase in the supply of currency. http://en.wikipedia....etary_inflation Link to comment Share on other sites More sharing options...
CB007 Posted August 4, 2013 Share Posted August 4, 2013 I nod my head at a lot of what you write, but Wikipedia can be wrong My biggest influence in economic theory is very poorly represented by your platform. Nonetheless, from what I've read from you it has served you well. Just take a critical eye if you ever get more In depth when wiki is your starting point. Just my opinion of course! Link to comment Share on other sites More sharing options...
CanuckClown Posted August 4, 2013 Share Posted August 4, 2013 I'm not 100% serious... was really just trying to point out the futility of subscribing oneself to any one 'school' of thought. Link to comment Share on other sites More sharing options...
mdehaan Posted August 4, 2013 Share Posted August 4, 2013 What do you mean by 'at the central bank level'? Central banks do not fix market prices, and I think over the last few years we have clearly seen that they can only have certain amount of influence over inflation. Supply and demand of essential goods, international politics and consumer confidence have as much to do with prices and value of currency as do monetary policies. Link to comment Share on other sites More sharing options...
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