In Fed and Out, Many Now Think Inflation Helps

No shit sherlock. US has been in liquidity trap half a decade. There is need for inflation or it turns into decade.

If the value of the dollar buys less stuff, that is only good for the economy if the economy benefits from this.

While that may be a "well-duh" statement it is counter intuitive in cases where it also means that it means that "Stuff" becomes more expensive than "Labor".

Often inflation means more people do things because it becomes cheaper to do things that are labor intense than it is to do things that are material intense.

Inflation can be driven by an increase in the cost of labor too however. If we raise the minimum wage then "Labor" will cost more and "stuff" may also cost more an inflation will not be a good thing.

But because so many people can't afford this affordable health care there is a push to up the minimum wage. Doing so will raise the cost of labor at the bottom of the wage pool, which will mean someone who was making 25% more than minimum wage will be barely making minimum wage, and likely won't get a wage increase for several years, so for those people they will live closer to the poverty line.

For things which are more "stuff" than "labor" the price will go up because people earn more and they will raise to match inflation which will mean more profit margin, as a result the companies that do more "stuff" with less "labor" will get richer.

Inflation by its definition means $1 buys less than it did previously. This is almost never a good thing over anything but the shortest of terms.

Stagnation is good. Deflation is better.

I think some people would say that Paul Krugman might have helped out a bit, too.

http://krugman.blogs.nytimes.com/2013/10/27/the-economics-of...

Given that the entire point of the Federal Reserve is to promote inflation it's probably good that they think it's a good idea-otherwise why do they think that they exist?

The whole problem is that inflation is theft. You are basically having your property taken out from under you without realizing it. It's historically been very popular as a means of taxing the public without them realizing that's what you're doing.

This probably not the space to get into all this but reading "The Creature From Jekyll Island" is a good start. That the major players in the banking industry got together in secret to write the Federal Reserve Act suggests who the system really benefits.

Sometimes inflation is good. Sometimes deflation. Sometimes even stagnation. Its all circumstantial.

The starter motor in your car is very good for getting the engine running but pretty terrible if you try to drive around with it engaged all the time.

We seem tragically bad at predicting what we need when and then doing it.