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Economists of the Austrian School understand that monetary expansion has the effect of making things more expensive than they otherwise would have been. At the root of the real-estate bubble was Federal Reserve monetary expansion funneled into the purchase of mortgages by Fannie Mae, Freddie Mac, and...
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I'm currently reading Currency Wars by James Rickards. In it, he says that one way for a nation to boost its exports is to depreciate its currency by printing money. For example, let's say that the price of a German car is 20,000 marks or 20,000 US dollars. And let's say the exchange rate...
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Theoretically speaking, monetary inflation will eventually lead to price inflation. However, we have yet to see price inflation since QE 1 and 2. What factors are keeping price inflation from taking effect, despite a a rise in the money supply? Some ideas are: wages of most americans have stagnated since...
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My economics professor keeps saying economic growth causes price inflation. Something about this does not make sense to me. If the economy is more productive, then the supply of goods is greater, so would not prices (assuming the money supply is stable) actually drop? He would argue that it is aggregate...
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Hi, Some economists are attributing the increased prices in Europe to increased demand from China. The following reply came to my mind: Is this even possible? Suppose the increase in prices is actually due to increased demand from the Chinese. But demand is supply . Demand is the stuff you offer in exchange...
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While reading " The Case for Legalizing Capitalism " by Kel Kelly, I stumbled upon a claim, which I interpret as "it's impossible for all prices in an economy to grow without monetary base growing". I've re-read pages around page 130 several times, but I still do not see any...