Keith Evans
Dec 25, 2020

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Any attempt to show a direct correlation between consumer prices and the quantity of money in the economy should be ignored completely. Those attempting to forward such arguments are stuck in gold standard thinking and will have little to contribute to any factual discussion of econ. One can usually spot them easily because they use simplistic examples to make their points (socks, really?).

Many things can cause consumer goods to rise in price, but those things are unlikely to affect the entire economy at the same time and across all segments of goods (the classical definition of monetary inflation). The price of butter will rise if the demand for cream exceeds the potential to meet it, but that will not cause bread (or sock) prices to rise. Economics with a fiat sovereign currency is always about resources, not money.

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Keith Evans
Keith Evans

Written by Keith Evans

Meandering to a different drummer.

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