MSN hosts a debate between Peter Schiff and Diane Swonk on Inflation: Fact or Fiction?. Schiff makes a number of very Austrian-sounding points:
- inflation is an expanion of money and credit, not rising prices
- inflation affected mostly financial markets in the 90s - money created here went abroad for goods, while foreigners sent the money back for stocks, then later bonds, and then in the lat few years, real estate
- this cycle is now leaking into commodities
- risking stock, bond, and real estate prices are all forms of inflation
- the Fed is trying to confuse the public about the true nature of inflation
- financial markets have been fooled about inflation
- inflation creates mal-investments and distorts economic thinking
- foreign central banks have inflated in parallel with the Fed to prevent their currencies from rising against the dollar
- A lot of China’s import demand for natural resources is an artifact of the export of US inflation
- US productivity growth is overstated by statistical manipulations
- the CPI is highly manipulated
- money supply growth is not relevant as a measure of inflation
- the Fed won’t figh asset-based inflation, so investors shouldn’t care about it
- the economy is “inflation-resistant” as long as profits are rising
- investors should be more interested in how the government defines inflation than in abstract theories such as inflation being a money and credit growth
- the Fed are “the experts” on inflation
- US productivity growth has been strong
- the US has the highest propensity to consume and invest of any country in the world