Tuesday, May 1, 2012

NYU Prof Calls for Just an Itsy Bitsy Dose of Inflation

New York University professor Robert Engle said policy makers should consider allowing slightly higher inflation as a way to spur the U.S. economy, reports Bloomberg.

“A little bit of inflation would do a whole lot of good for the U.S. economy, would certainly do a lot of good for the housing market,” Engle said at the Bloomberg Washington Summit hosted by Bloomberg Link today.

It is absolutely amazing that economists like Engle believe they can manage the economy to such a micro-degree that they can call for a "little bit" of inflation. Since any amount of money creation distorts the economy, one has to ask, what is Engle going to do when the distorted economic structure he has called for requires an even greater dose of money printing--since the first dose will have pushed up prices. (Don't forget the price of holding up a manipulated structure goes up also, when there is inflation) Is he just going to let the structure collapse or is he going to go beyond "a little bit of inflation"?

Prediction: We will hear from Engle again, when he blows up some hedge fund or other investment vehicle.

 Engle (and Eric Ghysels) have recently co-founded the Society for Financial Econometrics (SoFiE).

6 comments:

  1. These idiots must not understand exactly the economic consequences of inflation, as each monetary unit is depreciated the economic potency of each unit becomes more and more flaccid. Instead of actual growth, the opposite occurs when inflation takes place, a false growth or spur is achieved but the overall effect is negative, not positive.

    I'm am constantly amazed at how these people get their jobs!

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    Replies
    1. They aren't "idiots." They're shills for the central bankers and big government.

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  2. These pundits are like crack addicts.

    Here's a fun game:

    New York University crack addict Robert Engle said dealers should consider allowing slightly higher crack as a way to spur the body, reports Bloomberg.

    “A little bit of crack would do a whole lot of good for the body, would certainly do a lot of good for the whorehouse,” Engle said at the Bloomberg Washington Summit hosted by Bloomberg Link today.

    It is absolutely amazing that economists like Engle believe they can manage the economy to such a micro-degree that they can call for a "little bit" of crack. Since any amount of crack creation distorts the body, one has to ask, what is Engle going to do when the distorted body he has called for requires an even greater dose of crack smoking--since the first dose will have pushed up the highness. (Don't forget the high of holding up a manipulated body goes up also, when there is crack taking) Is he just going to let the body collapse or is he going to go beyond "a little bit of crack"?

    Prediction: We will hear from Engle again, when he wrecks some hotel room or other crack safehouse.

    -----------

    Seriously, try this at home. Any time you read an article about some inflationist yammering for more inflation, just switch the word "inflation" for "crack" or some other hard drug, and switch the word "the US economy" for "the body".

    The best part is that you don't even have to change many of the other words the inflationists typically use: "stimulus", "injection" (of liquidity), and "boost" (spending), "loosen" (monetary policy), and "ease" (money)!

    Here's what an addict might say to his dealer:

    "Come on man, quit tightening, loosen it up, I need stimulus, I need a boost, I need my injection!"

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  3. I get this picture in my head of the scene from Monty Python's "The Meaning of Life" where the Matre Di is imploring Mr. Creosote to have just "one more waffer thin mint"....lol

    Search for it on youtube if the reference eludes you...you will find it both funny and disgusting...which is always an interesting mix of emotions.

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  4. As someone who's living on the bottom of the wage scale right now, I can tell you that the pre-Fed kind of recession that involved falling prices would really help right now. As things are, I'm making the same wage I made 10 years ago but many prices have doubled. Bravo, Keynesian orthodoxy.

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  5. I wonder if this clown buys gas, food or pays an electric bill?

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