tag:blogger.com,1999:blog-5936637281134795592.post1133465333239628450..comments2024-03-08T08:55:52.985-08:00Comments on Whispers from the Edge of the Rainforest: "A little is alright" - the danger of inflationUnknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5936637281134795592.post-87991835170571061112012-03-21T06:38:42.472-07:002012-03-21T06:38:42.472-07:00That post-war inflation you're referencing is ...That post-war inflation you're referencing is what actually helped make the debt the US had accumulated during WW2 reasonable and kept the world from dipping into a second depression.<br /><br />You talk about people holding too much debt and people being too willing to lend and suffering from moral hazard and then you dump all over the one soft-landing available. Yes, 17% inflation for a year or two might actually do our dirty-work for us without being an unmanageable drain on our economy. (Our ideal long-term rate is closer to 4-6%) It lowers the real interest rate of the central bank, it imposes haircuts on lenders, on the value of bloated assets, and meanwhile those who hold for the long-term, the virtuous savers, don't really get punished since their equities tend to produce goods and services, whose aggregate real price level doesn't change too much.<br /><br />Inflation can unstick prices far better than a panic can.Valerie Keefehttps://www.blogger.com/profile/05715748655909242883noreply@blogger.comtag:blogger.com,1999:blog-5936637281134795592.post-25292321368205845292012-03-15T13:45:09.763-07:002012-03-15T13:45:09.763-07:00Those guys are all liars anyways.Those guys are all liars anyways.Anonymousnoreply@blogger.com