Comments by "Nattygsbord" (@nattygsbord) on "Federal Reserve Price Stabilization Policy is Incorrect" video.

  1. It is about power and how to economic pie is divided, and it leads to winners and losers as you say. I am no expert in this field. I believe the argument behind this yearly inflation is that companies borrow money to expand production, and then production is expanded and more goods flows into the market. But the problem is that due to the law of supply and demand, will all those extra goods drive down prices. And that forces the producers to sell their products for a price lower than they had expected and that leads to lower profits that cannot repay the loans - so then you get a crisis. The other example mentioned is the Japan thing that you brought up. I have always found those arguments in favor of intervention as not very convincing. I can however see that inflation can have positive effects as it lowers the debt burden for the government, it helps ordinary people as they got more debts than personal wealth, high inflation do also create more equal societies - which one can see that Europe became a more equal society during the 1940s and 1950s when high inflation was normal to pay off the debts from World war 2. When rich people are in power of a country, they do usually not allow their debts being inflated away - and the result is a debt burden that never goes away (England still paid off their debts of the Napoleonic wars a hundred years later), government taxes are taken from the poor people (tax payers) and given to rich people (bond holders), and economic growth was sluggish compared to what it could have been. Ordinary people are the job creators and engine of growth in an economy and not the rich people. Its consumers who creates jobs. And rich people in management wants to slash as many jobs as they possibly can to increase the rate of profit instead.
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