Re: investment and unemployment

[GGard97342@xxxxxx]

In a message dated 03/04/2000 17:39:40 GMT Daylight Time, mosler@xxxxxxxx
writes:

> > snip:
>  > >Deflation has been the norm in peacetime throughout most economic >
> history
>  > for the obvious reason that men and women are always improving >their
>  > production skills. A three hundred year graph of inflation shows >that
the
>  > saecular trend of deflation of prices accelerated after 1801, >and only
>  > turned to inflation when the use of high interest rates to >control
>  > inflation was introduced. In Britain the graph changes >direction sharply
>  > after November 1951 when the first rise in Bank Rate >for 20 years took
>  > place. Interest rate policy subsequently ensured the >relentless rise in
>  > inflation.
>
>  There was usually some kind of 'gold standard' for those 300 years?
>  The deflation observed was therefore a drop in the relative value of gold?
>
>  http://www.warrenmosler.com

Surely price deflation is a rise in the purchasing value of gold and money?

But who cares about such semantics? The crunch is that price deflation puts
every indebted trader in trouble. His nominal income falls, but his nominal
debts remain the same. That is what matters, and that is why deflation is to
be feared far, far more than inflation. Sadly those of us who are old enough
to have direct experience of the truth of that are now few in number . Those
of us who are still left must therefore shout it loud and often.

Gepffrey Gardiner