Skippy

There was still inflation, but it was going into the prices of assets like stocks and real estate, rather than commodities, consumer goods, and wages.

Is asset price inflation a problem, both in general, and/or in the current context?

And if so, why?

I actually think this is an extremely interesting question, both theoretically and empirically. If the former, then there is something fundamentally wrong with free market asset pricing. If the latter, then what is the best empirical solution policy?

There was still inflation, but it was going into the prices of assets like stocks and real estate, rather than commodities, consumer goods, and wages.

Is it because they think that will lead to very big increases in the money supply?

But why should anyone think that increasing the supply of money causes inflation? Some people called monetarists said so and they proved to be wrong, as the 1980s saw an increasing divergence between rates of monetary expansion and rates of inflation.

In any case, increasing the supply of money is quite compatible with falling demand for existing output. The increased cash balances can be used to fund payment of old debts that were taken to buy old outputs—the car or vacation you bought last year—and/or to fund the repayment of maturing government securities. That is, increasing the supply of money need not be inflationary if the demand for money or quasi-money such as Treasury bonds increases by just as much.

Furthermore, if the relevant debt that is being monetized is owed to foreigners and the supply of money in their own countries is increasing just as much, there is no reason to think that handing them new money to retire the debt will result in them bidding up prices for real output in either our country or theirs, since even when the real rate of interest was higher, they had had chosen to purchase government bond rather than purchase real outputs.

“Monetizing the debt” seems more akin to the Weimar Republic than 1930s trade tariff’s?

“This is economic war” ~ remember what Treasury Secretary John Connaly’s said to the ROW in 1971 about the dollar: it is “our currency, but your problem.”

In most locals and most fields business licenses are a courtesy license and more a method of taxation then anything else.

In a number of consulting type businesses it is not particularly hard to work without any particular license at all.

If it is just as easy to start a business in England as it is here in the USA, then I do not know why your business turnover numbers would be so much lower then ours.

And for those who say the economic data doesn’t point to a Depression yet – well, us unwashed masses in the bottom quintile knew there was a recession way before the eggheads would admit to it. And we know that we are in a Depression now.