Mental Experiment

[Finster]

Re: Mental Experiment

Looks like its time a pick a nit or two. Per the actual data, the Great Depression and virtually every recession have been caused by relatively rapid rates of deceleration of money supply creation. Note that I'm using a broader definition of money supply than is normally used - I include things like credit creation and monetary base.

Here's the actual data from 1920-1940 and as you can see, the correlation is unmistakable.
[Chart]

My basic nitpick is that inflation does not *necessarily* have to precede deflation, even though in actual practice in the US it has. A significant drop in rate of money creation is enough to do it.

Here's a bit of a longer term picture, just in case, showing similar correlations and a fuller recession/depression picture:

[Chart]

In light of my unnatural fondness for nits, it is appropriate to open with a great big *bless you*! Such a rare treat of raw meat from our bartaceous buddy!

Behold, some charts to examine! But … what this? … alas, having had my finster fangs set atwitter, my gut calls out "Where’s the beef?" For in turning aside the garnish, all my beady, bloodshot, eyes can make out is an empty plate.

I find nothing in yonder charts to contradict my position. First, despite having had more or less routine "depressions" without benefit of a central bank, it took the creation of the Federal Reserve to give us a truly "Great" one. Just as we’d had inflations and deflations before, only in the wake of the monster inflation the Fed nursed into being in the 1920’s could we have a truly catastrophic deflation.

As for the micro-nit re the possibility of deflation occurring without first having had a prior inflation, I’d make two points. First, I did not quite say that inflation was a necessary precondition for deflation. Not even that it is a sufficient condition. Second, in the most fundamental sense, it nevertheless is true. Unless you are prepared to argue that credit has existed since the Big Bang, at some point in history credit would have had to expand to exist at all. From zero, credit must expand to reach any finite level, so without some inflation credit does not exist.

The problem is not the existence of some necessary and natural amount of credit expansion, but artificially - as a matter of public policy - trying to force it into existence. Only when, through the agency of some governmental intervention, it is determined to deliberately expand credit, and thus inflate, do we truly run into problems. When the amount of credit is in dynamic equilibrium with a free economy, it will naturally expand and contract in relation to the economy’s needs. But when it is driven above the natural level sought by the economy, it has a tendency to contract. This leaves the self-styled gods of money in the position of having to either redouble their efforts (and thus make the problem worse) or permit the body of credit to take its natural course and deflate.

There is no pain-free way out. No more than there is with someone addicted to hard drugs. The artificial inflation at first "feels good"; the economy gets euphoric … high. But eventually as the new credit saturates the economy, the economy develops a tolerance to it. It adapts to the artificial credit spigot. People find they have more debt than they are comfortable with, and the credit must be made cheaper still, else they will begin to shed the excess debt. One way or another they will do so, whether is through the agency of retiring debt in nominal terms, or through the agency of falling units of currency.

Either way, however, when the drug is withdrawn, the addict suffers withdrawal. The point I am arguing here is whether we should blame the addict’s troubles on the lack of drug, or his having become hooked on it in the first place. All too many economists are effectively in the position of arguing that since withdrawing the drug causes discomfort, then the drug must be good for the body. I say they are all wet; that they need to look deeper for the true original cause of the addict’s problem.

So if you are in the first camp, then indeed we do have a meaningful disagreement. If you are in the second, we will just have to find some other nits to pick … ;-)

[Finster]

Re: Mental Experiment

good luck, senor quixote.

Only the truly gullible windmill-tilter would fall for the official line on inflation. Consider this. If a "little" inflation merely lubricates the economy, then why is it a felony for thee or me to inflate? Counterfeiters printing up money in the basement ought to be lauded in the press for their public service.

... really jk, think about it. The real question is not whether inflation is good for somebody, but who it's good for ...

[jk]

Re: Mental Experiment

finster, i'm not the guy you need to convince. what you wrote was:

If the problem is insufficent flexibility in nominal wages, then perhaps we ought to be rexamining some of our institutions and habits of thinking. Not trying to paper over it with devices designed to deceive.

you can start by knocking the scales from the eyes of workers at gm and ford.

[Finster]

Re: Mental Experiment

finster, i'm not the guy you need to convince. what you wrote was:


you can start by knocking the scales from the eyes of workers at gm and ford.

What a disappointment. I was about to suggest that I be granted the sole privilege of being allowed to create money here in the dungeon of the Haunted Manor… ;)

Alas, politicians reserve that right to themselves…

Indeed, the workers at GM and Ford are bit by bit having those scales be peeled away. Just as many in the airline industry have. It is in fact possible for nominal wages to adjust. The main point of stickiness has a lot to do with our having forgotten that the employer-employee relationship is fundamentally no different that that of any other buyer and seller. When you or I go to Wally World and buy some stuff, we are an "employer" to Wally World. And when Ford or GM buys services from auto workers, it is shopping in the labor pool.

Over the course of the industrial revolution, however, employers have found that they can pay workers less overall by entering into a sort of long-term arrangement that compensates the work in part with security. They also sought to lower the overall cost of compensation by deferring much of it into a benefit pool. Workers, even though they did not really realize it, were becoming long term creditors to their employers.

In a dynamic, changing economy, however, it is tantamount to mutually assured destruction. Workers find that their employers were not as credit-worthy as they thought. Employers find their employees were more expensive than they thought.

The situation has simply become way too complicated and confusing for either side to know what it is truly paying or earning. Far better for employers to pay 100% of compensation in cash at the time of service, let workers buy their own health insurance and fund their own retirement plans, and let each side know where they stand.

[jk]

Re: Mental Experiment

Over the course of the industrial revolution, however, employers have found that they can pay workers less overall by entering into a sort of long-term arrangement that compensates the work in part with security. They also sought to lower the overall cost of compensation by deferring much of it into a benefit pool. Workers, even though they did not really realize it, were becoming long term creditors to their employers.

actually, compensation in the form of "benefits" originated as a way to pay people more, not less. during wwii there was a labor shortage and there were wage controls. some companies started offering medical coverage as a way of raising compensation while obeying the letter of the wage controls. [thus began our disastrous system of employer centered health care insurance.]

[bart]

Re: Mental Experiment

In light of my unnatural fondness for nits, it is appropriate to open with a great big *bless you*! Such a rare treat of raw meat from our bartaceous buddy!

...

So if you are in the first camp, then indeed we do have a meaningful disagreement. If you are in the second, we will just have to find some other nits to pick … ;-)

You're most welcome Manor Maven.

And *sigh*... if you just have to call it a micro nit, then so be it ... *sigh*... but you did say "Deflation is caused by inflation" and I'm taking one point for later defense/use. ;)
How many nits or micro nits does it take to make a full "finn" anyhow? ;)


I do have another nit too, based on your statement about the Fed being a necessity for a Great Depression. I submit the record from 1861-1899. Both of the long and fairly deep recessions during 1873-1878 and 1882-1884 happened without our "illustrious" Fed in the mix.

[Finster]

Re: Mental Experiment

You're most welcome Manor Maven.

And *sigh*... if you just have to call it a micro nit, then so be it ... *sigh*... but you did say "Deflation is caused by inflation" and I'm taking one point for later defense/use. ;)
How many nits or micro nits does it take to make a full "finn" anyhow? ;)

The essence of my position is as was framed here:

Either way, however, when the drug is withdrawn, the addict suffers withdrawal. The point I am arguing here is whether we should blame the addict’s troubles on the lack of drug, or his having become hooked on it in the first place. All too many economists are effectively in the position of arguing that since withdrawing the drug causes discomfort, then the drug must be good for the body. I say they are all wet; that they need to look deeper for the true original cause of the addict’s problem.

So if you are in the first camp, then indeed we do have a meaningful disagreement. If you are in the second, we will just have to find some other nits to pick … ;-)

What I am saying here is that the real problem in the first instance is not the deflation, but the inflation that led to it. The problem of the drug addict in withdrawal is not the lack of drug, but having gotten himself into it in the first place.

Alan Greenspan appeared to disagree, saying he didn’t know a bubble (inflation) until it popped on his nose. That the Fed should do nothing about it, but instead merely try and mitigate the consequences. My position is in direct opposition; that the problem lies in the inflation itself.

If you agree with Greenspan, then we have something significant to debate, otherwise, we are in micro-nit territory. I assumed that we were in the same camp based on your statement in another thread that if your constitution allowed for a central bank, you would make its prime directive one of zero inflation.

I do have another nit too, based on your statement about the Fed being a necessity for a Great Depression. I submit the record from 1861-1899. Both of the long and fairly deep recessions during 1873-1878 and 1882-1884 happened without our "illustrious" Fed in the mix.

Hard to tell how much of this one is semantic and how much is real, because of the fuzzy and flimsy nature of words like "depression" and "recession". I usually try to avoid words like that as much as possible, preferring quantitative measures like inflation, deflation, etceteras.

In real economic terms, those things called "depressions" in the 1800s were fundamentally more like what we now call "recessions". After the 1930s experience, we pretty much abandoned the term "depression" because of the very scary connotations that went with it. But far as I’m concerned what we had in the 1970s-1980s were the modern-day equivalent of the 1800s experiences you call depressions.

Yet there is only one that we call "Great" - the one that followed the formation of the Fed and its 1920’s inflationary escapade!

On the other hand, we also need to remember that although the Fed itself was first authorized in 1913, that doesn’t mean we didn’t have central-bank-like entities or effects prior to that. Prior to the formation of the Fed, inflation was primarily the function of a distributed banking system and the US Treasury. The creation of a central bank merely institutionalized it and made it easier to have more or less permanent inflation. Lincoln used inflation to help fund the Civil War, and the deflation that followed had a lot to do with the periods you cite. And it is no coincidence that the Fed was formed contemporaneously with the US involvement in World War I. Along with the first permanent income tax to boot!

[Chart]

I’ll see your chart and raise you one. The below shows clearly that the most violent deflation of the past three-and-a-half centuries occurred in the wake of the post WWI inflation underwritten by the Fed. The closest prior contenders followed the inflations of 1790-1815 (associated with the Revolutionary and 1812 wars) and 1860-1865 (associated with the Civil War). (Reminder: on this chart a falling dollar value signifies inflation, and a rising dollar value deflation.)

No serious deflations occured at any time without there having first been an inflation.

[bart]

Re: Mental Experiment

If you agree with Greenspan, then we have something significant to debate, otherwise, we are in micro-nit territory. I assumed that we in the same camp based on your statement in another thread that if your constitution allowed for a central bank, you would make its prime directive one of zero inflation.

Yes, we are in basic agreement. I just saw a possibly opportunity to have that nit, and also make the point that a deflation doesn't always have to be preceded by an inflation.

Hard to tell how much of this one is semantic and how much is real, because of the fuzzy and flimsy nature of words like "depression" and "recession". I usually try to avoid words like that as much as possible, preferring quantitative measures like inflation, deflation, etceteras.

In real economic terms, those things called "depressions" in the 1800s were fundamentally more like what we now call "recessions". After the 1930s experience, we pretty much abandoned the term "depression" because of the very scary connotations that went with it. But far as I’m concerned what we had in the 1970s-1980s were the modern-day equivalent of the 1800s experiences you call depressions.

Very much like the term "panic" was abandoned right around the time the Fed was formed.

I'm not quite as comfortable with the inflation and deflation terms as you, given the rather rocky discussions about their meaning over the years let alone their rather fuzzy definitions in many dictionaries of today.

...
On the other hand, we also need to remember that although the Fed itself was first authorized in 1913, that doesn’t mean we didn’t have central-bank-like entities or effects prior to that. Prior to the formation of the Fed, inflation was primarily the function of a distributed banking system and the US Treasury. The creation of a central bank merely institutionalized it and made it easier to have more or less permanent inflation. Lincoln used inflation to help fund the Civil War, and the deflation that followed had a lot to do with the periods you cite. And it is no coincidence that the Fed was formed contemporaneously with the US involvement in World War I. Along with the first permanent income tax to boot!

And that is one of my basic points too - its not so much the Fed as it is the concept and structure of a Central Bank. The track history of the 1st and 2nd US Central Banks were not pretty, ending as they did in panics/recessions, much like what happened after the Civil War.

One interesting historical sidelight - the "greenback" was the term used to describe Lincoln's inflationary dollars. Its an inconvenient fact to those who say that all fiat currencies end up worthless too, since it ended up being fully redeemed at what boils down to par value.

I’ll see your chart and raise you one. The below shows clearly that the most violent deflation of the past three-and-a-half centuries occurred in the wake of the post WWI inflation underwritten by the Fed. The closest prior contenders followed the inflations of 1790-1815 (associated with the Revolutionary and 1812 wars) and 1860-1865 (associated with the Civil War). (Reminder: on this chart a falling dollar value signifies inflation, and a rising dollar value deflation.)

Be careful - you almost made part of my point for me when comparing the early 1930s with the post Civil and 1812 war periods... ;)

[Finster]

Re: Mental Experiment

…and also make the point that a deflation doesn't always have to be preceded by an inflation.

But it does. That was the point of my last chart. Serious deflations virtually always represent the General Market’s attempt to restore homeostasis following an inflation. Not only are there theoretical reasons for it (see next post), but also empirical data covering nearly 350 years of US history.

I'm not quite as comfortable with the inflation and deflation terms as you, given the rather rocky discussions about their meaning over the years let alone their rather fuzzy definitions in many dictionaries of today.

I am not all that comfortable with them myself! ;) But they look pretty solid in comparsion with truly fuzzy terms like "recession" and "growth". At least in the case of inflation and deflation, we have something we can quantify in terms of the market value of a currency. If it rises, it’s deflation; if it falls, it’s inflation.

But before you say "now, just hold on a minute there pardner", I admit I’ve used at least one other major meaning in these discussions. And that is inflation as the expansion of money and credit, and deflation as the contraction of money and credit. But which meaning is being used at any point should be clear from the context.

As a coda to the above, note that I make no attempt to distinguish between "money" and "credit" in that second meaning of inflation and deflation. That’s because our modern money is credit!

Bottom line, the problem with the terms "inflation" and "deflation" is not that they are fuzzy, but that there are multiple meanings in use. If it is clear either explicitly or from context which meaning is being used, they are quite clear and precise.

And that is one of my basic points too - its not so much the Fed as it is the concept and structure of a Central Bank. The track history of the 1st and 2nd US Central Banks were not pretty, ending as they did in panics/recessions, much like what happened after the Civil War.

One interesting historical sidelight - the "greenback" was the term used to describe Lincoln's inflationary dollars. Its an inconvenient fact to those who say that all fiat currencies end up worthless too, since it ended up being fully redeemed at what boils down to par value.

Correct.

You are catching on … ;)

Be careful - you almost made part of my point for me when comparing the early 1930s with the post Civil and 1812 war periods... ;)

That’s why I was careful to insist that the "depressions" of the 1800s were comparable to the "recessions" of the past sixty years "in real economic terms". The resemblance to the early thirties was more in the monetary sense.

Yes, we are in basic agreement. I just saw a possibly opportunity to have that nit,

And I saw an opportunity to have a *nit* *fit* … ;)

[Finster]

Re: Mental Experiment

Here are, by the way, those theoretical reasons. Suppose in Blaze's sand dollar monetary system, someone sets up a bank. Rather than carrying loads of sand dollars around with which to carry on everyday commerce, people take their sand dollars to the Sand Bank, and get receipts for their deposits. Because each receipt is an IOU entitling the holder to some specified number of actual sand dollars, people begin using them for transactions just like the sand dollars themselves.

But suppose the bank issues more receipts for sand dollars than it actually has on deposit. The total number of sand dollars in our economy is the same as before, but the number of sand dollar "credits" has expanded. As the Sand Bank continues to issue more and more sand dollar slips, they lose scarcity value and prices begin to rise.

Then one day somebody whispers that in fact, the Sand Bank may not have enough Sand Dollars to cover all the IOU slips out there. People begin rushing to the Sand Bank demanding actual sand dollars for their slips. The first ones to arrive may get them, but eventually somebody is going to get caught short with worthless sand dollar credits.

Eventually, the number of sand dollar credits falls back into line with the number of real sand dollars available. If this happens, the value of the sand dollar unit rises back to its earlier level. Prices begin to fall. Thus, in reaction to the inflation, we have a deflation.

The alternative is to simply declare by government fiat that only sand dollar credits can be used as money. Sand dollars themselves are first confiscated, and then returned to the marketplace decades later as "investments" whose "price" in terms of sand dollars can be anything. This allows the Sand Dollar Federal Bank to continue to issue sand dollar credits and for the value of those credit to continue to fall without restraint.

Finally, if this sounds a little arcane, here's a simpler mental experiment you can try at home.

Deflate a ballon that hasn't yet been inflated ...

[bart]

Re: Mental Experiment

Finally, if this sounds a little arcane, here's a simpler mental experiment you can try at home.

Deflate a balloon that hasn't yet been inflated ...

It must be Monday, you seem more intent than normal on creating a *finn*... ;) ... and yes, that was rather arcane.

Find a functioning economy (balloon) without money (air)... :p

[bart]

Re: Mental Experiment

But it does. That was the point of my last chart. Serious deflations virtually always represent the General Market’s attempt to restore homeostasis following an inflation. Not only are there theoretical reasons for it (see next post), but also empirical data covering nearly 350 years of US history.

No way, Jose - there is no valid economic or other reason why an inflation *must* precede a deflation, regardless of whether it has ever happened or not. And I covered your *balloon of excellence* in the previous post. :p

I am not all that comfortable with them myself! ;) But they look pretty solid in comparison with truly fuzzy terms like "recession" and "growth". At least in the case of inflation and deflation, we have something we can quantify in terms of the market value of a currency. If it rises, it’s deflation; if it falls, it’s inflation.

We can quantify any of those terms, but my real point is its the drifting away from precision definitions that leads to fuzzy macro economics. Inflation is not "higher prices" except in day to day water cooler conversations by economic and investing illiterati.

Recession was even quantified a while back as two back to back significantly declining quarters of GDP (and we're in one now by that definition)... and if it weren't for *creative* moments with GDP and other calculations, it would still be workable.

As a coda to the above, note that I make no attempt to distinguish between "money" and "credit" in that second meaning of inflation and deflation. That’s because our modern money is credit!

Thou speaketh sooth!

That’s why I was careful to insist that the "depressions" of the 1800s were comparable to the "recessions" of the past sixty years "in real economic terms". The resemblance to the early thirties was more in the monetary sense.

Yes... sort of... but again, one of the "old" definitions of a depression is where GDP drops over 10% over an extended period (more than the 2-3 quarters of a recession) and also goes below zero, and by that definition the 1865-6, 1873-9 and 1882-4 periods were depressions too.


And it wouldn't be me unless there was a chart. ;)

[Finster]

Re: Mental Experiment

It must be Monday, you seem more intent than normal on creating a *finn*... ;) ... and yes, that was rather arcane.

Find a functioning economy (balloon) without money (air)... :p

You're gradually glomming onto the point ... ;)

I am not impugning the existence of any and all credit. Of course credit is instrumental to the functioning of an economy. My beef is with central planners who think that more is always better and make a policy out of expanding credit beyond the amount which - without their interference - would natually exist. This is what the Fed normally does. And the economy is always trying to restore equilbrium. Inflations and deflations are the result of the fight, as first one side and then the other gains the upper hand.

[Finster]

Re: Mental Experiment

No way, Jose - there is no valid economic or other reason why an inflation *must* precede a deflation, regardless of whether it has ever happened or not.

Oy, how impressive is your sheer fortitude in carrying on in battle with neither theory nor fact on your side! For we lack 1) any plausible explanation for how anything could deflate without first having been inflated; or 2) any empirical example of the same. This regardless of whether we are talking about money, credit, balloons, truck tires, or rubber duckies.

We can quantify any of those terms, but my real point is its the drifting away from precision definitions that leads to fuzzy macro economics. Inflation is not "higher prices" except in day to day water cooler conversations by economic and investing illiterati.

Correctomundo, O Literate One. Here we are referring to the sense of the terms used by the Austrian school; i.e. the expansion of money and credit - even more particularly when expanded by artificial and covert means by central planners.

Recession was even quantified a while back as two back to back significantly declining quarters of GDP (and we're in one now by that definition)... and if it weren't for *creative* moments with GDP and other calculations, it would still be workable.

Workable, perhaps, but still worse than useless. The amount and intensity of attention given to such things is totally unwarranted. It breaks down a continuous multi-colored spectrum of economic reality into a binary black-or-white choice. Consider, for instance, the following situations:

1) Two consecutive quarters of GDP growth of -0.2%

2) Eight consecutive quarters of GDP growth of +0.1%

3) Two consecutive quarters of GDP growth of -4.0%

4) Eight consecutive quarters of GDP growth of +8.0%

The simplistic, useless, binary classification of economic growth into either "recession" or "no recession" lumps together the extremely different situations 1) and 3); and also lumps together the extremely different situations 2) and 4). Yet it distinguishes as night and day the barely consequential relation between 1) and 2). In fact, depending on the context, overall economic performance in situation 1) might even be better than in situation 2), but the history books would neverthess call 1) a "recession" and 2) "growth". Again, worse than useless.

Terms like" recession" are better left to politicians, central bankers, and other obfuscators than any person seriously interested in understanding finance and economics.

Yes... sort of... but again, one of the "old" definitions of a depression is where GDP drops over 10% over an extended period (more than the 2-3 quarters of a recession) and also goes below zero, and by that definition the 1865-6, 1873-9 and 1882-4 periods were depressions too.

The meaning of GDP in the nineteenth century, when inflations were temporary, and the meaning of GDP in the modern, post-war, nearly-constant-inflation environment, is so different as to defy meaningful comparison. Inflation severely distorts and undermines any attempt to discern real GDP. Even when consumer price inflation was reported more faithfully, we still had a major disconnect on the time axis. In times of rising inflation, nominal GDP rises before consumer prices do, leading to the illusion of real GDP growth. Conversely, when inflation is declining, nominal GDP falls before consumer prices do, leading to the illusion of real GDP recession. Conventional economists are misled by these illusions because they fail to understand that consumer price trends themselves lag inflation.

It is staggering how much time is wasted trying to precisely classify economic ghosts that are nothing more than artifacts of our flawed econometrics!

[bart]

Re: Mental Experiment

Oy, how impressive is your sheer fortitude in carrying on in battle with neither theory nor fact on your side! For we lack 1) any plausible explanation for how anything could deflate without first having been inflated; or 2) any empirical example of the same. This regardless of whether we are talking about money, credit, balloons, truck tires, or rubber duckies.

I give it about about a 5 on the 10 scale... ;)

1. No explanation is necessary since I never asserted anything other than a working economy, and money always exists in one.
2. No necessity to provide an example since the logic is self evident.



http://www.nowandfutures.com/grins/rubber_ducky.wav

Workable, perhaps, but still worse than useless. The amount and intensity of attention given to such things is totally unwarranted. It breaks down a continuous multi-colored spectrum of economic reality into a binary black-or-white choice. Consider, for instance, the following situations:

1) Two consecutive quarters of GDP growth of -0.2%

2) Eight consecutive quarters of GDP growth of +0.1%

3) Two consecutive quarters of GDP growth of -4.0%

4) Eight consecutive quarters of GDP growth of +8.0%

The simplistic, useless, binary classification of economic growth into either "recession" or "no recession" lumps together the extremely different situations 1) and 3); and also lumps together the extremely different situations 2) and 4). Yet it distinguishes as night and day the barely consequential relation between 1) and 2). In fact, depending on the context, overall economic performance in situation 1) might even be better than in situation 2), but the history books would neverthess call 1) a "recession" and 2) "growth". Again, worse than useless.

Terms like" recession" are better left to politicians, central bankers, and other obfuscators than any person seriously interested in understanding finance and economics.

I submit that almost any long term consistent view that adds to understanding and makes valid classifications is useful, especially when definitions don't change and valid historical comparisons can be and are made. Just because a panic is called a recession now, as long as the basic definition remains the same, matters little.

On top of that, you ignored the word "significant" in my original statement - a .3% change isn't significant in your situation #1.

And besides, its your assertion that I'm trying to classify everything into "recession" or "no recession"... *harruumph*... ;)

The meaning of GDP in the nineteenth century, when inflations were temporary, and the meaning of GDP in the modern, post-war, nearly-constant-inflation environment, is so different as to defy meaningful comparison. Inflation severely distorts and undermines any attempt to discern real GDP. Even when consumer price inflation was reported more faithfully, we still had a major disconnect on the time axis. In times of rising inflation, nominal GDP rises before consumer prices do, leading to the illusion of real GDP growth. Conversely, when inflation is declining, nominal GDP falls before consumer prices do, leading to the illusion of real GDP recession. Conventional economists are misled by these illusions because they fail to understand that consumer price trends themselves lag inflation.

It is staggering how much time is wasted trying to precisely classify economic ghosts that are nothing more than artifacts of our flawed econometrics!

Of course the GDP picture now is different than in the 19th century, but when *fiddling* is removed via things like John Williams adjustments then the comparisons become valid again.

Little question too on consumer prices lagging GDP growth, that has been true since time immemorial in any decent sized economy.