Monday, May 05, 2008
I recently reported how many Japanese are after seeing the end of price deflation realizes that paying more for the things you buy isn't as beneficial as non-Austrian economists have claimed. Now Bloomberg News similarly reports how some of the criticism against the ECB for allegedly being too focused on fighting inflation have silenced, as the surge in energy and food prices have reduced the purchasing power of European consumers. Keynesians have long dismissed concerns about the long-term effects of inflating the money supply and focused only on the short term effects of increasing the money supply. But now we are living in that long run and the long-term purchasing power reducing effect of previous money supply increases is what is now being felt.