Ludwig von Mises states that any amount of money in a given economy is enough. Now I understand there is some harm from inflation. It discourages savings, which are a cornerstone of economic growth. Also the new money does not enter the economy evenly. So politicians, bureaucrats, lockheed martin and other merchants of death get this money first and spend it at it's old uninflated value while people far removed from the statist system spend this money at it's new inflated value. But given that any amount of money in an economy is enough, is inflation really a 'tax' as ron paul claims? Is it a 'transfer of wealth from the middle class to wall street' or is this just populist rhetoric ungrounded in economic reality?

It's all of the above. And no, it's worse.

Read your own statement. If group X gets new money first and uses it to divert reasources to themselves from everyone else, how is that not a tax?

If you ask yourself why counterfeiting money is bad, you'll also understand why inflation is bad.

Wiki the Weimar Republic just to understand what is happening...

I don't think counterfeiting is bad. Anyone can morally and ethically print whatever designs they want. The immoral act is doing violence on others who print the same designs as you do. Of course if we could all safely print the dead president's fancy pictures no one would bother.

It is interesting to note that Austria did not experience hyper inflation during the time that the Weimar Republic did, mostly because of constant memos and political pressure by Ludwig von Mises. He was HATED by the Nazis, who he opposed vigorously when his entire society embraced their insanity, and they forced him to flee his home country and then even from Europe to America. It is a great shame that when he got there this incredible economist could not even find a paid teaching position at a time when every marxist moron got tenure.

It's fraud.

I remember the Jimmy Carter inflation, and that was exactly like the Obama inflation with the extended unemployment benefits. What I am not seeing now is the 18% interest rates, which are being restricted by the Fed, although you can't fool gold...

Is it the Jimmy Carter inflation, or the Lyndon Johnson inflation? Guns and butter aint cheap.

When we had LBJ as president we still had confidence in the USA. It took a real bumbler like Carter to bring a feeling of a total lack of confidence...

Let us take the most optimistic view of inflation possible. That is inflation is 3% a year and it will always be 3% a year no matter what happens. However, after three years, money hidden under a mattress has lost 9% of its value. Saving money in the bank is a huge negative in terms of expectation because the money will positively go down in value. Best to spend it all now before it loses 3% of its value.

Now change that to the real inflation percentage and imagine people rushing out to spend their money because there is no point to save. That is essentially our economy. The poorest of the poor will always be poor because even when they gain money, the purchasing power is inflated away.

Even if you make the actual same thing? What is the deception? Where is the harm?

I agree that passing off a poor quality imitation of the item as a high quality item is fraud.

Well if the imitation is perfect and the fact that it wasn't printed by the official entity cannot be detected, then you are inflating the supply of notes thus devaluing everyone else's (and perhaps triggering a run)

If the imitation is anything but perfect, at some point someone will find themselves with a fake note and lose all the value that they exchanged for it.

That's why inflation is a good thing. It discourages people from saving money under a mattress which is terrible for the economy, and encourages them to either spend it, which is good for the economy, especially now, or to invest it, which is really good for the economy.

In case you guys forgot, people saving money is not a good thing per se. It's only a good thing when it leads to investment. And investment is essentially the process of buying things now - typically durable goods and labor - in order to be able to sell stuff later. In that context, the prospect of things being more expensive later than now, i.e. inflation, makes investing MORE desirable, not LESS. So undoubtedly inflation is a GOOD thing.

Obviously I'm talking about moderate inflation such as the 3% above, not Zimbabwe style hyper inflation.

moderate inflation >>> no inflation >>> deflation >>>>>>> hyperinflation.

Inflation would be an especially good thing in the current context as we have a major private debt problem in the current economy and inflation would help to erode the value of this debt compared to income levels.

lol

jesus

solid arguments, imo.

You cannot separate savings and investment. They are the same thing. Money saved is money invested.

No. When you put money under your mattress, you save it but you don't invest it.

Also, if you or your bank want to invest your savings by offering them as loan to an entrepreneur who will make it fructify, but no such entrepreneur actually wants to borrow your saving, it does not magically become an investment until someone actually uses that money in a productive way.

So if it's under a mattress, how does a piece of paper magically turn into a productive piece of equipment that didn't exist before? How is money actually "invested"? It is merely a store of value.

Guess what: markets clear. Saving money does not harm the economy. All that happens is that the general price level falls until a new equilibrium is reached. If that means that businesses making things people don't want for present consumption go out of business, good. That frees up capital for people to invest in things that people will be buying in the future with, guess what, their savings.

Your sort of monetary crankism was debunked a hundred years ago.

PS. That is not a personal insult. That is what the proponents of this sort of economic gobbledygook were called, monetary cranks. They advocated schemes like printing paper money (always the magical "right" amount, which strangely nobody can ever settle on), stamping paper money so that it expires, randomly selecting ranges of serial numbers on paper money for expiration, etc. Anything to force people to spend when they would otherwise save, all as a panacea for economic ills. All it ever did was increase consumption, decrease savings, transfer wealth, and inhibit capital formation, and lead to false booms and real busts.

Right, but everyone puts their money in banks now a days, and these banks do invest your savings. That is one problem with the modern banking system - it has combined two separate roles of banks into one. Modern banks are bankrupt - they cannot meet the demands of their creditors (consumers).

1. Banks were never meant to store your money. The take your money and try to earn a spread. That is why, I advise to put all your money in a trading account, businesses, and hard assets. To put money in bank so they can loan it out to someone like Donald Trump or Joe sixpack is a recipe to disaster.

2. Many smaller banks are healthy and been around since the 1800s.