[quote=harvey][quote=CA renter]Please explain what, specifically, you think is “self-contradictory” and why.[/quote]
My fingers would grow weary from typing all the examples … but the standout from this thread is how you proclaim that deflation would be good because it “helps workers” while complaining about low interest rates because it “hurts people on fixed incomes” (I presume you are being sympathetic to grandmas with savings bonds…)
Of course deflation and high interest rates are contradictory, but you jump back and forth demanding both from the “powers that be.”
You make up your own rules of economics to suit your argument, often reversing yourself from sentence to sentence. And, as Lerocky points out, there’s always an opinion piece somewhere on the internet to support your thesis of the moment.
And now, on cue, you will declare that your are intellectually superior to me and anyone who disagrees with you. Of course it is fact, by your edict.[/quote]
I should be ignoring you, troll, but I’ll humor you with a response. I’d still love to see examples of my “self-contradictory” posts.
Addressing the issue of deflation being good for workers, it is well known that wages tend to be stickier than the prices of most goods and assets. As prices go down, workers (and savers) can buy more goods with their money — their purchasing power is increased. That’s a good thing.
You’re mixing up cause and effect. In the current low-rate environment, we are experiencing these low rates NOT because of what investors would demand, but as a result of the Federal Reserve’s manipulations. Did you not notice what was happening to interest rates as the credit bubble started deflating and price deflation set in??? Interest rates were shooting UP, not down. Rates can go up during deflationary times (real rates are almost always positive), especially if that deflation is the result of a bursting credit bubble. Money is more dear during deflationary times, so the price of money goes UP relative to what’s going on in the rest of the economy. Interest rates are highly positive during most deflationary events.
What the Federal Reserve has caused is high cost/asset price inflation as a result of artificially suppressed rates. This gives investors/savers a NEGATIVE real return on low risk or “risk free” investments. Their purchasing power is diminished.
My statements are in no way self-contradictory.
And, yes, I’m intellectually superior to you, though I’ve never explicitly stated that before, so not sure where your “on cue” statement comes from. Perhaps it’s because I’ve kicked your tail in all of our debates? Our posts over the years are proof of this fact, as well.
