Most of the paper is
creating asset inflation, rather than goods inflation so far.
Not exact matches
Credit concerns typically
create a spike in demand for default - free
assets such as U.S. government liabilities, so even though there is a much larger float than is likely to be sustained over time without
inflation as the ultimate outcome, credit concerns tend to support the value of these liabilities and hence mutes immediate
inflation pressures (essentially, monetary velocity declines as these liabilities are sought as a default - free store of value).
It has become easier to ride the wave of
asset - price
inflation — the stock market and real estate bubble — than to
create new material means of production.
This skepticism about the future — even with
asset prices rising — has
created a negative feedback loop, driving investors to safe harbors such as cash, bonds, gold and yield - generating securities thereby reducing demand,
inflation and growth in an ongoing vicious cycle.
Having rapidly pulled ahead over the past three decades, China must remain free of rentier ideology that imagines wealth to be
created by debt - leveraged
inflation of real - estate and financial
asset prices.
Marketing and new technology
create demand - pull
inflation for specific products or
asset classes.
There is quite a strong argument that in spite of its deployment as a form of monetary
inflation QE was empirically deflationary via numerous channels: by encouraging cash hoarding by savers in the absence of adequate income; by skewing wealth and income towards those most likely to hoard it; by an inter-temporal Ricardian equivalence; in your own Austrian terms by driving excess investment to the upper reaches of the production structure,
creating excess capacity and malinvestment; by skewing the incentives of company directors towards short - term speculation; by perpetuating the survival of zombie entities; by encouraging investment in unproductive
assets.
Commercial banks in the West have
created most credit for speculation and
asset - price
inflation over the last thirty years, not to fund capital formation and industry.
Even the biggest Fed doves admit that low rates
created a heightened risk of
asset bubbles and unstable
asset inflation.
If you are
creating an investment portfolio then you should consider that certain types of investments (
asset classes) have a better chance of beating
inflation than others.
Rather than doing it with an annuity purchase,
creating an
inflation hedge through your market - based
assets will almost always make more sense.
One of the key things we believe in is
creating your own «
asset base» that will
create independence for you and help you fight off the
inflation monster!
The excessive risky lending of these institutions
created inflation - not of goods but of
asset prices.
Asset inflation is an increase in the prices of
assets (or a subgroup of
assets) without equivalent improvement in the ability to
create more goods in the future.
My point is that right now, we're funnelling free money to the richest sections of society by supporting
asset markets and spreading this impact over the rest of society via the small
inflation created.
A growing economy with modest
inflation has
created a favorable environment for risky
assets.