Most people associate ‘inflation’ with rising prices, but the disease goes much deeper than that. Inflation is a phenomenon wherein money becomes so abundant it disrupts relative price formation and hence interferes with the vital transmission of information about the state of the countless interactions of supply and demand, plenty and scarcity, which take place on the market. As the fever rises, mistakes accumulate, conflicts intensify, timings clash, finances become stretched, and coherence is lost. A rising price is one thing. Prices -plural- rising at varying speeds and in an ever less predictable manner is a much more dangerous pathology.
Though the latest set of profit data for China’s industrial concerns were outwardly positive, there are still many unresolved questions hanging over both the economy and the country’s politics, some of which we examine here. None of that is likely to deter bond investors and ETF buyers, of course, since their principal concern will be to bring their holdings into line with a major benchmark index which has just created a vast source of funds for Xi Jinping’s minions to exploit. We ask: should they?
As a sort of Keynes-manqué, Stephanie Kelton’s moment in the limelight is being granted her for much the same reason as was that of her more illustrious predecessor: she is telling free-spending politicians what they always want to hear – viz., that their habitual incontinence is statesmanship of the highest order.
With our good professor never missing an opportunity to remind anyone and everyone that her book – a veritable almanac of economic hocus-pocus – tops the non-fiction charts (surely a gross miscategorization if ever there was), we must therefore re-emphasize our view that the REAL peril of Magic Money Tree economics – aka MMT – is what it means for the private sphere in general and the scope for genuine entrepreneurship in particular, NOT whether it causes prices to rise or not. The question is one of liberty, not inflation; real prosperity, not growth.
In the drive to prevent (viral) death by means of mass (economic) suicide, our Overlords have begun to order the cessation of activities in all ‘non-essential’ businesses.
While one can sympathise with the sentiment, it is, sadly, yet another example of the ignorant doing harm by trying to do good, since it shows absolutely no understanding of the complexity of the modern economy or of the elevated degree of interdependency which exists within it.