Yaz on CNBC: "I don't think inflation is an issue here"

[Slimprofits]

The Sqwak Box this morning...

Yaz: "No, I mean, inflation would be the best...Inflation, Inflation, let's run around like chickens with our head cut off. You want inflation. Inflation would save most Americans. They've got payments that they have to make and their assets are now worth less. That would be a great salve. A little bit inflation would be a wonderful thing."

Diane: "I mean c'mon, the inflation we are seeing at the pump and you know, at food stores, this is not easy stuff for the middle class."

Yaz: "Thats not inflation. That is a response to the dollar weakening and it's already in the market. Inflation is not prices going up and taxes, if you raise the price of oil, all you've done is the raise the tax on this economy. That's not inflation. That's, that's a dreadful arguement."

[Slimprofits]

Re: Yaz on CNBC: "I don't think inflation is an issue here"

The very next guest, Steven Ratner says "I don't believe at this very moment we are in recession...we have a lot of fear out there..." "relatively low inflation...."

[EJ]

Re: Yaz on CNBC: "I don't think inflation is an issue here"

The Sqwak Box this morning...

Yaz: "No, I mean, inflation would be the best...Inflation, Inflation, let's run around like chickens with our head cut off. You want inflation. Inflation would save most Americans. They've got payments that they have to make and their assets are now worth less. That would be a great salve. A little bit inflation would be a wonderful thing."

Diane: "I mean c'mon, the inflation we are seeing at the pump and you know, at food stores, this is not easy stuff for the middle class."

Yaz: "Thats not inflation. That is a response to the dollar weakening and it's already in the market. Inflation is not prices going up and taxes, if you raise the price of oil, all you've done is the raise the tax on this economy. That's not inflation. That's, that's a dreadful argument."

Changes in price in response to a weak currency are not inflation? That is at best an expression of ignorance and at worst a misrepresentation. Price levels are set by import prices; all other prices follow. That's Economics 101.

Dollar depreciation has been used for at least four years as a deliberate policy to boost exports and reflate the economy. As the debt deflation process continues, here's the laundry list of future liquidity trap (real interest rates are too high) prevention measures that might also be taken:

- Announcing a positive inflation target
- Announcing a price-level target path
- Expanding the monetary base via open-market operations in Treasury bills and more unorthodox assets
- Reducing long interest rates via a ceiling on long interest rates or via a commitment to keep the instrument rate equal to zero for a substantial time in the future
- Depreciating the currency by foreign-exchange interventions
- Introducing a time-varying exchange-rate target
- Introducing a tax on money
- Introducing more expansionary fiscal policy
- Affecting inter-temporal substitution of consumption and investment by time-variable tax rates
- A policy of combining a price level target path, a currency depreciation and a crawling peg

Escaping from a Liquidity Trap and Deflation: The Foolproof Way and Others, Lars E.O. Svensson, January 2003 (pdf)

[jk]

Re: Yaz on CNBC: "I don't think inflation is an issue here"

Escaping from a Liquidity Trap and Deflation: The Foolproof Way and Others, Lars E.O. Svensson, January 2003 (pdf)

this link doesn't work

[FRED]

Re: Yaz on CNBC: "I don't think inflation is an issue here"

this link doesn't work

Ok, now try it.