Quote of the day 5th March 2014
"It is not enough to win a war: it is necessary to organise the peace"
(Aristotle)
(Aristotle)
Nick Herbert on his visit to flood hit areas of Cumbria
Please note that the post below was published more than ten year ago on 21st November 2009 Nick Herbert MP, shadow cabinet member for the Environment, Food, and Rural Affairs, was in Cumbria this morning to see the areas affected by the flooding. He writes on Conservative Home about his visit. Here is an extract. I’ve been in Cumbria today to see the areas affected by the floods. I arrived early in Keswick where I met officials from the Environment Agency. Although the river levels had fallen considerably and homes were no longer flooded, the damage to homes had been done. And the water which had got into houses wasn’t just from the river – it was foul water which had risen from the drains. I talked to fire crews who were pumping flood water back into the river, and discovered that they were from Tyne & Wear and Lancashire. They had been called in at an hours’ notice and had been working on the scene ever since, staying at a local hotel. You cannot fail to be impressed by the
Comments
Its also important to answer a quesion with an answer, not a round about statement.
o cam see uou tried this yourself chris a little earlier with "inflation is a tax" you went on this sort of mission to speak about how they have it under control and things, and then did not make any logical sence in your answer.
so back to nursery school we go
if a pound of silver buys me 50 mars bars.
If then a mars bar costs me more than 1/50 of a pound of silver we see the value of silver has fallen against mars bars, its not so valuable usually because there is more siver around.
Now equate that to your fiat, and you see your entire argument falls apart.
all I ask is politicians start answering questions with an ANSWER
In response to your off topic comments
1) What I wrote about inflation makes perfect sense.
2) If you want an answer, ask a question. Most of your posts on the inflation topic consisted largely of statements, and I took phrases like "do you see the problem here?" to be rhetorical.
The one specific question you asked me about inflation was whether I seriously considered that the money supply had never increased by more than 4%. I thought I had quite clearly answered that, but if you do not understand the answer, it is no, I was not saying that.
But I am saying that inflation as measured by the Consumer Price index is running at 1.9%.
If you want to use the word inflation in a different way to everyone else, e.g. to mean increases in the money supply, that is your privilege. It may even give you some useful insights. And because I happen to be a professional economist I am one of the tiny minority who might possibly have some idea what you are getting at.
But the Oxford English Dictionary, the Office for National Statistics, the entire Economics profession, and the vast majority of people who have an opinion on the subject use the term inflation to mean the rate of change of prices, and on that basis what I wrote makes perfect sense.
A equation which is true of any economy by definition is MV = PT
where M = money supply
P = prices
T = output of the economy in volume terms
V = velocity of circulation e.g. how frequently money is used.
There is a strong correlation between M and P - if government sends M through the stratosphere, P will follow.
But it is not a 1:1 relationship and using changes in M as a measure of changes in P, let alone as a definition of inflation, is not sound.
George Orwell mentioned it changing the definition of words as a tool of the totalitarian state to prevent people from having ideas that were dangerous to the state
If you check any pre 1980's dictionary then
Webster’s New World Dictionary: College Edition, 1970:
1. an inflating or being inflated. 2. an increase in the amount of money in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices
You say i dont understand your non answer, of course i do, its just not an answer is it.
You are mixing a disease with a symptom and then claiming the symptom is the disease when its not
You are saying that the common cold is a runny nose, when its not, the common cold is a virus and one of its symptoms is a runny nose (though not always)
Inflation is an increase in the money supply one of the symptoms of which is rising prices (though not always)
If you have to insist that, should we want to check a dictionary to see which of us is using the word correctly, we have to find one which is at least 34 years old, that alone is a dead giveaway that it is you, not me, who is trying to find one which gives the meaning of the word that suits your own needs.
Unfortunately none of the three dictionaries I have to hand are quite that ancient: the oldest is the sixth edition of the Little Oxford Dictionary (1986). I have also checked my copies of the Oxford Reference Dictionary, second edition (1996) and a more recent 2012 edition Oxford English dictionary.
I referred to the Oxford English Dictionary in the comment above: did you really think I would have done so without making sure that I was using the word in the way that dictionary defines it?
My 2012 Oxford dictionary defines inflation as follows:
"A general rise in prices and fall in the purchasing power of money."
Both the other dictionaries in the house give almost identical definitions for the type of inflation we are talking about (obviously there are alternative definitions of inflation which refer to things like putting air into a football, car tyre, or a balloon.)
The Oxford Reference dictionary gives an additional meaning which follows immediately on from almost identical words to those quoted above, as follows:
"An increase in available currency REGARDED AS CAUSING THIS" (my capitals.)
In other words, if you have the COMBINATION of a rapid rise in prices AND a big rise in the available money supply, AND the latter is regarded as causing the former, you can use the word inflation to refer to both.
That is consistent with the posts and comments I have made on the subject, as for isntance when I said a couple of posts above that if the government sends the money supply through the stratosphere, prices will follow.
What does not fit well with either the Oxford English Dictionary definition of inflation, or the way economists generally use the term, is to use the word inflation to describe an increase in available money which is not associated with a rise in the general level of prices, or a rise in a specific group of prices (e.g. asset price inflation.)
I normally regard it as something akin to sacrilege to suggest throwing a book on a bonfire, but in the case of your 44-year old copy of Websters I am almost tempted to make an exception.
(For the avoidance of doubt, that was a joke.)
If you want to get into arguments about the meaning of words, I suggest you make use of a dictionary published within the last decade.