cawacko
Well-known member
I lent my buddy George Gilder's new book "The Scandal of Money" and we've been having a discussion about it. He wrote this wrote this back in response. I'm curious what others here think about how my buddy says we should measure inflation. Is he off base here or is he on point with his critique?
""I finished the money book yesterday. Interesting read. The “money is time” and “money is information” stuff got a bit tedious, but I totally agree with where he came out – we need an electronic banking system like bitcoin but using an actual store of value like gold.
The more I read/hear about our government’s monetary policy, the more I get scared. I’ve been reading today about the great inflation of the 70’s and it seems we could end up in the same place today.
I’ve also been reading about how a true measure of inflation should take into account the price of investment assets such stock, bonds and housing, as a decision to buy those assets is effectively a decision to spend money on goods and services in the future rather than today. I’ve always thought that asset prices ought to be part of inflation measures. Once we take into account the price of assets I think we’ll find that inflation has actually taken off, and at that point the fed will either have to ramp up interest rate hikes (unlikely because it will disrupt the markets) or deal with higher and higher inflation. Eventually investors will wise-up to the fact that the US has been woefully irresponsible managing its finances and the fed doesn’t have the balls to actually tame inflation, and that the US will just print its way out of the problem. This should cause inflation expectations to soar and to kill treasuries. So I want to short treasuries. But of course the fear in the market and the lack of a safe investment alternative will probably cause people to buy more treasuries unless there’s total Armageddon.""
""I finished the money book yesterday. Interesting read. The “money is time” and “money is information” stuff got a bit tedious, but I totally agree with where he came out – we need an electronic banking system like bitcoin but using an actual store of value like gold.
The more I read/hear about our government’s monetary policy, the more I get scared. I’ve been reading today about the great inflation of the 70’s and it seems we could end up in the same place today.
I’ve also been reading about how a true measure of inflation should take into account the price of investment assets such stock, bonds and housing, as a decision to buy those assets is effectively a decision to spend money on goods and services in the future rather than today. I’ve always thought that asset prices ought to be part of inflation measures. Once we take into account the price of assets I think we’ll find that inflation has actually taken off, and at that point the fed will either have to ramp up interest rate hikes (unlikely because it will disrupt the markets) or deal with higher and higher inflation. Eventually investors will wise-up to the fact that the US has been woefully irresponsible managing its finances and the fed doesn’t have the balls to actually tame inflation, and that the US will just print its way out of the problem. This should cause inflation expectations to soar and to kill treasuries. So I want to short treasuries. But of course the fear in the market and the lack of a safe investment alternative will probably cause people to buy more treasuries unless there’s total Armageddon.""