Re: investment and unemployment

[Warren Mosler <mosler@xxxxxxxx>]

>

>
> >
> >  http://www.warrenmosler.com
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> Surely price deflation is a rise in the purchasing value of gold and money?

Yes, of course, sorry, I mispoke.

>
>
> But who cares about such semantics? The crunch is that price deflation puts
> every indebted trader in trouble.

Yes, and the borrower is really 'short' gold.  The rising value of gold
is really a short squeeze for borrowers.

> 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.
>

And inflation raises the 'moral hazard' issue of geometrically expanding
borrowing.

>
> Gepffrey Gardiner

It is said that every trade makes somebody happy!

Warren