The Marginal Productivity Of Debt

Good read GB. cheers.

i accept that printing money increases neither wealth nor purchasing power. but doesn’t the nominal value of goods (almost) have to increase eventually - if enough money is printed? (like in zimbabwe)

Not necessarily. The price of electronic goods fell in price for the last decade due to global wage arbitration between higher cost and lower cost countries (Ireland used to make a lot of computer components), economies of scale due to the concentration of global manufacturing in China and pegging of currencies in order to maintain advantage over rival trade partner. However in Ireland inflation found another outlet in the cost of services, especially those provided by the state (example Health, “benchmarking”, quangos, pensions ) rose and rose as more money was pumped into the public sector on the back of taxation on people borrowing greater amounts to buy property, the result is the quality of most state state services did not improve substantially, but they now cost more.

Annual Irish Consumer Price Inflation was 5.0% in May; Excluding mortgage interest, the rate was 2.6% - Service inflation was 9.1%
By Finfacts Team, Jun 7, 2007
finfacts.com/irelandbusiness … 0275.shtml

Prices can also rise in response to supply problems, for example materials such as Lithium used in batteries

World Lithium Supplies and Electric Vehicles.
3 Jun, 2008 10:58 am
scitizen.com/stories/Future- … Vehicles-/

Finally the cost of servicing the debt from the property bubble across both private and public sector, these costs are also passed on in the costs of goods and services, but the credit and money supply is shrinking making the cost of servicing the debt even more burdensome.

So we exported inflation to china .The price was we lost our manufacturing base.

What’s all this “we” business, paleface? :question: :wink:

Note, this is a long article