The post from Mr McCain is here.
The post includes a short video of an interview of a member of Spinal Tap talking about his amplifier, where the scale goes to 11, rather than the normal 10, thus suggesting that it has more power than normal amplifiers. The blogger's point is that even if the scale goes to 15, the power is still only what it is rated for.
For this blogger, the real issue is inflation. Mr McCain quotes the Ace of Spades blog site:
And once confidence in the currency is damaged enough... well. Ask interwar Germany, ask Zimbabwe. Ask a dozen Latin American countries which turned on the printing presses to "satisfy" their debts.Inflation like interwar Germany is something to be really afraid of. The cost of things were changing daily and the Middle Class was wiped out. And, it helped pave the way for the Nazi rise to power. It was hyperinflation and hyperinflation is a truly ugly event. The flip side is deflation, which is what the US experienced in the early 1930s. As a result of deflation and the poor performance of Presidents Hoover and Roosevelt in dealing with it (See Amity Shlaes's book, The Forgotten Man: A New History of the Great Depression), credit dried up and some locations went to printing their own script.
The trick is knowing when inflation switches to deflation and visa versa. The experts in this area could probably hold a convention in a small broom closet.
Regards -- Cliff
Spinal Tap is indeed one of my favorite movies...
ReplyDeleteHere's a link to one of the best analyses I've found on "fiat money", which is essentially what we're using these days: http://globaleconomicanalysis.blogspot.com/2007/06/why-does-fiat-money-seemingly-work.html
In an unrelated but similar vein, I've also found much sense in this discussion of the actions of our equity markets to further steal from the middle class: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a0wzLWr5Lbm8
One of the main sources of all this impoverishment is, however, I believe, found in this history lesson on the Lex Gabinia from old Rome: http://economistsview.typepad.com/economistsview/2006/09/the_lex_gabinia.html
Now that our government is apparently in the business of ruining ourselves to save us, it's more important than ever for us to understand what's being done wrong, and to demand better of our representatives.
Great post!