Inflácia alebo deflácia?

Jedná skupina ekonómov tvrdí, že sa nachádzame v štádiu inflácie, kdežto druhá hovorí o deflácii.

Analysts and economists seem to be divided over this issue. According to some market observers, we are living in a highly inflationary environment. After all, money supply growth is extremely strong in most countries and this represents inflation.


The other camp argues that since prices of certain consumer goods are either stable or in decline, we are indeed witnessing genuine deflation. In my view, these "deflationists" seem to miss the point that falling consumer prices (due to improvements in technology or the relocation of manufacturing to relatively inexpensive developing nations) have nothing to do with deflation and everything to do with economic progress. In fact, I would argue that in the current economic environment; due to technological advances, rising productivity, free trade and cheap labour, prices SHOULD be declining. After all, this is the whole point of genuine economic development!


In an ideal world with a stable monetary base (zero monetary inflation), prices of almost everything (with a few exceptions) would be in decline. That would be a sign of real economic progress as people's savings would buy them more goods with every passing year. In our far from ideal world however, the factor preventing this from occurring IS monetary inflation.


Due to central-bank sponsored inflation, prices of assets (whose supply is relatively limited when compared to money) are going through the roof! As a result of the ongoing inflation, even basic commodities which are critical for human survival (land, energy and food) have become very expensive, hence scarce for the average person. So, next time when someone tells you that we are witnessing deflation, tell them to look no further than the escalating cost of housing, energy, food, education and medical care.


Finally, if we were indeed witnessing genuine deflation (contraction in the money-supply), all asset-prices would be declining rather than flirting with multi-year highs!


Source: SafeH

24.04.2007

"The world is governed by self interest only. ." Johann Friedrich Von Schiller