by John » Wed Apr 17, 2013 7:55 am
I've looked at your model and read your fiatdies page. It's clear
that you put a lot of work into this. I looked at some of the
formulas, but it's not intuitively obvious where the numbers in those
formulas are coming from.
I sympathize with what you're trying to do, because I've been trying
to understand the complementary question: How come trillions of
dollars is being poured out by central banks, but it's NOT causing any
serious inflation. So when I asked you why your simulation has been
wrong for the last ten years, it was a serious question that needs to
be understood, because it's the same question that I've been focusing
on.
I approach this question, like most questions, from a generational
point of view. That's why I keep referring back to the 1970s.
In the 1970s, there was little monetary stimulus and huge
inflation. In the 2000s there was massive monetary stimulus,
and no inflation or even deflation. I've tried to analyze
this from the point of view of businesses that were created
during the 1930s Great Depression -- reaching their peak of
hiring in the 1970s, creating wage inflation, versus
being frozen by bureaucracy, unions and regulations in the 2000s,
and laying off more than hiring, creating wage deflation.
As I'm typing this, I see the headline, "Bank of America profit
quadruples to $2.6 billion." Nothing like that is happening to
ordinary businesses. The same kind of thing happened in the 1930s,
but I'll bet nothing like this happened in the 1970s.
So one thing you might wish to consider in your simulation is to
insert some generational concepts, in particular to illuminate the
differences between the 1970s and the 2000s.
I've looked at your model and read your fiatdies page. It's clear
that you put a lot of work into this. I looked at some of the
formulas, but it's not intuitively obvious where the numbers in those
formulas are coming from.
I sympathize with what you're trying to do, because I've been trying
to understand the complementary question: How come trillions of
dollars is being poured out by central banks, but it's NOT causing any
serious inflation. So when I asked you why your simulation has been
wrong for the last ten years, it was a serious question that needs to
be understood, because it's the same question that I've been focusing
on.
I approach this question, like most questions, from a generational
point of view. That's why I keep referring back to the 1970s.
In the 1970s, there was little monetary stimulus and huge
inflation. In the 2000s there was massive monetary stimulus,
and no inflation or even deflation. I've tried to analyze
this from the point of view of businesses that were created
during the 1930s Great Depression -- reaching their peak of
hiring in the 1970s, creating wage inflation, versus
being frozen by bureaucracy, unions and regulations in the 2000s,
and laying off more than hiring, creating wage deflation.
As I'm typing this, I see the headline, "Bank of America profit
quadruples to $2.6 billion." Nothing like that is happening to
ordinary businesses. The same kind of thing happened in the 1930s,
but I'll bet nothing like this happened in the 1970s.
So one thing you might wish to consider in your simulation is to
insert some generational concepts, in particular to illuminate the
differences between the 1970s and the 2000s.