Yes: http://www.foodtimeline.org/foodfaq5.html

https://www.socialsecurity.gov/oact/cola/AWI.html

if the government had not intervened there would have been no inflation to begin with.

I'm clarifying that its interpretation is incorrect. I know it works. All it is saying is that the total amount of trades using dollars = the GDP. Understanding that to indicate that money changing hands more often causes inflation is wrong.

That is correct in the case of inflation caused by savings moving into housing.

A problem occurs when the asset used as money (unit of account) inflates or deflates. Deflating currencies no more prevent malinvestments than inflating currencies. I'm beginning to think that you are illiterate.

You just assumed your conclusion. I am asking WHY this is a problem.

I have asked this 16 times now, and you have just stated it is a problem. Explain why this is a problem.

There is no way to empirically demonstrate this concept. We can only demonstrate that as societies become wealthier, the amount of stuff that an hour of labor can buy goes up. This shows only that labor is becoming more valuable relative to other goods, but does not tell us why. It could be because the skill of average worker is rising, or it could be that there is more stuff in the world relative to the number of workers, or both.

This link compares what an hour of labor buys today compared to what it was able to purchase in the past:
http://mjperry.blogspot.com/2011/08/...-in.html#links

What causes inflation is an increase in the money supply. The model predicts this quite accurately.

Yes the amount of stuff an hour of labor can buy goes up in a wealthy society. But this is not the same as saying that a society become wealthier CAUSES an increase in wages. It simply means that wages are stagnant in terms of currency but that currency has now deflated to be worth more.

Think about it, if every time the world got wealthier people demanded more money in labor costs causing goods to become more expensive proportionally, the world would never actually manage to get wealthier. People's wages would never be enough, a salary raise would be met with even higher prices everytime. But this is not what happened in 19th century America.

Also your link overloads on electronics, a very capital-intensive and technology driven set of goods that have experienced significant deflation over time. He should look at a more balanced basket of goods.

TomCollins: "So what is the problem? (maybe the 15th time will be the charm)." I don't see the word 'why' in that statement.

Would you agree that stopping free men from trading with each other is a problem?

Currencies that change in value prevent the easy exchange of assets over time. The more they change, and the more erratically and unpredictably they change, the harder it is to make agreements to trade anything in the future, or to repay debts over time.

That is only one way to cause inflation.

You are also assuming this wealthier society isnt fundamentally capable of producing goods with less labor. Im not sure how you define a wealthier society, but I would assume that has technology has advanced in America, labor has been less and less needed. A classical example is people being replaced by machines in factories.

You're confusing yourself by trying to consider the role of money. Imagine a world without any money, where workers are paid in goods instead of money. If an average worker is compensated with more goods as society becomes richer, it means only that he is better compensated than workers in the past.

If he is better compensated, it can either mean he is more skilled/valued, or that employers have bid up the compensation they are willing to offer workers because they are richer, or that people are less willing to work because they are richer, or a combination of all three.

In any case, we can only correlate richer nations with higher wages (in terms of goods). We can't say precisely why they are better compensated.

And you have yet to prove that it isn't the dominant source of all the inflation that has existed in the last 100 years. From my graph of increased base money supply and the fed's balance sheet and the lack of any fed or inflation in the 1800s, I would say the evidence is pretty strong in favor of this type of inflation being the chief culprit.

Do you see anytime in the future when the Federal Reserve just plans to unload its entire balance sheet? Imagine the public outrage over 25% interest rates. The Fed is never going to do that, its keeping those T-bills forever, buying new ones everytime an old one matures.

And yet the amount of stuff we give to workers is going up over time. Strange, don't you think?

"Wealthier society" means that the average individual owns nominally more wealth than in the past.

He isnt better compensated in the past if prices go up too to compensate for the fact he gets paid more. Isnt that your whole argument?

Yes, but that doesnt have to cause inflation. It just means technology is better and workers arent as neccessary as they were in the past.

I would say a "wealthier society" is on in which the average individual owns inflation-adjusted more wealth than in the past.

We don't know what the main source of inflation is over time. We can only guess, but we know that increasing the money supply too fast is just one way to cause inflation. By the way, measuring inflation is a joke. It's like trying to measure how much your mother loved you in the past compared to now. Value is always subjectively determined. The price of goods and services rise for many reasons and it it would be nice if economics could actually show us how little we know about what we imagine we can design.

The Fed may sell them slowly to fight inflation in the future. Selling assets on their balance sheet will raise the value of money.

The amount of stuff an hour of labor can earn today is higher than in the past. That means that prices have no risen as fast as the value of labor.

No, it only shows that the value of labor is rising compared to goods. The price of labor is rising, therefore, and labor is involved in the production of most goods. It stands to reason that the price of labor rising would cause the price of all goods to rise, and because dollars do not involve labor to produce, goods and services would rise in value faster than the value of a dollar, which does not depend on labor to be produced.

Adjusting what we own for inflation doesn't make sense. If you are an average worker that drives a better car and lives in a better house and has better food than average workers of the past, you are better compensated for your time than those workers. You don't need to inflation adjust the size or quality of your home and car.

I dont know why you are so convinced we dont know the main source of inflation like its some sort of mysterious illness that cant be solved. If you agree the MV = PY equation is valid and you agree that M has been increasing faster than Y, then P must go up. Hence inflation. This is a very basic argument that have yet to see refuted.

As for prices of goods being subjective determined, that is true, but I think we can both agree that rent prices, food prices, technology/entertainment prices, and energy prices over the last 50 years are pretty objective measures of prices. And we can definitely see a big increase in the price of everything over time.

And sure, the Fed will "fight" inflation, but there will still be 3-5% inflation ever year, which basically amounts to a 3-5% wealth tax levied on holders of the US dollar by the American government and Wall Street.

It's a problem for the person taking out the loan for what he/she thinks is 2%. The lender loves the deal. So we are on the same page.

Only if the government declares a new currency and confiscates the Fed's balance sheet.

The other causes of inflation are very well ignored and that is quite strange.

The price of all those things, I would argue, is falling in real terms. The work required to acquire all of them is falling over time.

Ive said this several times, but the damage has already been done with the Fed increasing the balance sheet. Its in the past. Prices are already 30x what they were 50 years ago. And the Fed WILL NEVER empty their balance sheet. Isnt going to happen. So this inflationary damage is permanent.

And I ignored the other causes of inflation because they arent real causes of long-term inflation.