Re: A conversation about inflation
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The solution to this is to keep inflation running at one steady, predictable, and relatively low level. The most important component of inflation is not the actual amount of money in circulation, it's the amount of inflation people EXPECT to occur.
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governments inflate first and foremost to distort the value of their debt. If inflation was steady and predictable then the purpose of inflating is defeated because prices should readily adjust under those circumstances thereby voiding any purposeful inflationary attempt.
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