Current Bitcoin inflation rate = 35%. Price = stable

[wogaut]

Inflation, properly defined, is the degree by which the money supply increases. It is a useful metric unto itself irregardless of economic activity or other metrics. To claim that "GDP" and "prices" must be considered when strictly measuring inflation is to pervert the term beyond its useful definition. If you take umbrage with this statement, then please explain. I understand many contemporary economists use "inflation" to describe what is more accurately referred to as CPI figures, but many contemporary economists also think spending and consumption is productive behavior, so I'm skeptical of their prescience and take issue with their distortion of terminology.

"properly defined". Always thought you were funny judging from your avatar.

You just won't accept that there are several definitions, and the ones I mentioned about are just as "proper", in fact accepted by most mainstream economists.

But my main point would be, as pointed out the OP mentioned the CPI (he googled "us inflation" but really got CPI data), so it appeared he compared bitcoin inflation to the US CPI inflation. So the "proper" thing is to compare apples to apples, no matter what definition you prefer. Can't directly compare numbers from different equations without conversion or correction. It's a different metric.

[cunicula]

Don't waste your time explaining. It is like speaking to a troop of monkeys. Your just going to get pissed on and hooted at. Best approach is to piss on them instead. It will help prevent the know nothings from falling into error.

The discussion is carrying on with civility and consideration, until cunicula shows up, and calls everyone monkeys who should be pissed on. I think the irony is perhaps lost on him?

Cunicula - though your economic reasoning is fallacious, and your demeanor is inappropriate at best and obnoxious at worst, I still refrain from calling you names and have never advocated urination as fitting punishment for you. If you'd like to debate the economics with us "libertarian austrian asshats" whom you loathe so mightily, please do. But stop the immaturity. Your untenable positions can be considered if dressed for the event, but if you're unable or unwilling to engage in proper discourse please go elsewhere.

Inflation, properly defined, is the degree by which the money supply increases. It is a useful metric unto itself irregardless of economic activity or other metrics. To claim that "GDP" and "prices" must be considered when strictly measuring inflation is to pervert the term beyond its useful definition. If you take umbrage with this statement, then please explain. I understand many contemporary economists use "inflation" to describe what is more accurately referred to as CPI figures, but many contemporary economists also think spending and consumption is productive behavior, so I'm skeptical of their prescience and take issue with their distortion of terminology.

I know you're not a monkey, so stand up for yourself and address the issue like a man or bow politely and find your way to the door.

Idiot, one does not 'debate' definitions. If you were not an idiot, then this would be clear to you already. Definitions are meant to make communication convenient. The rest of the world, including 99.9% of academic economists like me, and 99.9% of regular Joe's too, defines inflation as changes in the price level. If you prefer to use the asshat definition, so be it. What can I do if you decide that chocolate means cheese and are very obstinate about it? I certainly can't argue with you. Again, what an idiot you are. You certainly didn't learn this asshattery in school, which I suggest you go back to.

[JusticeForYou]

Depends on what 'is' is. ~ Bill Clinton (Idiot?)

Define: "Planet" it took since Galileo Galilei to Hershel to the IAU in 2006 argued of the definition of Planet. 

Pedantic I guess. But meh...

[notme]

Don't waste your time explaining. It is like speaking to a troop of monkeys. Your just going to get pissed on and hooted at. Best approach is to piss on them instead. It will help prevent the know nothings from falling into error.

The discussion is carrying on with civility and consideration, until cunicula shows up, and calls everyone monkeys who should be pissed on. I think the irony is perhaps lost on him?

Cunicula - though your economic reasoning is fallacious, and your demeanor is inappropriate at best and obnoxious at worst, I still refrain from calling you names and have never advocated urination as fitting punishment for you. If you'd like to debate the economics with us "libertarian austrian asshats" whom you loathe so mightily, please do. But stop the immaturity. Your untenable positions can be considered if dressed for the event, but if you're unable or unwilling to engage in proper discourse please go elsewhere.

Inflation, properly defined, is the degree by which the money supply increases. It is a useful metric unto itself irregardless of economic activity or other metrics. To claim that "GDP" and "prices" must be considered when strictly measuring inflation is to pervert the term beyond its useful definition. If you take umbrage with this statement, then please explain. I understand many contemporary economists use "inflation" to describe what is more accurately referred to as CPI figures, but many contemporary economists also think spending and consumption is productive behavior, so I'm skeptical of their prescience and take issue with their distortion of terminology.

I know you're not a monkey, so stand up for yourself and address the issue like a man or bow politely and find your way to the door.

Idiot, one does not 'debate' definitions. If you were not an idiot, then this would be clear to you already. Definitions are meant to make communication convenient. The rest of the world, including 99.9% of academic economists like me, and 99.9% of regular Joe's too, defines inflation as changes in the price level. If you prefer to use the asshat definition, so be it. What can I do if you decide that chocolate means cheese and are very obstinate about it? I certainly can't argue with you. Again, what an idiot you are. You certainly didn't learn this asshattery in school, which I suggest you go back to.

What term do academic economists like you use to discuss what his definition is?  If you don't have such a term, why is it ignored?

[JusticeForYou]

Ok. Inflation experts. Correct me if wrong.

Inflation is the rise in prices of products. This occurs two ways. The scarcity of the resource wanted increases with the demand for said resource. And/Or increase the money supply. (i.e. print more money)

Inflation can be one, either, or a combination of both.

Just how I see it. I maybe wrong though.

[benjamindees]

The term you are looking for is "money printing".

Academic economists won't ever use that term, of course, because academic economists exist only to obfuscate the fact that bankers have the rest of us on a treadmill, to which they've attached their margarita blender.

So they purposely conflate all reasonable language, in order to create this false dichotomy between what they term "inflation", ie. rising prices, and "deflation", death spiral of unemployment.  In this false dichotomy, the death spiral of unemployment is not caused by overpopulation or resource depletion or technological advancement or even just general abundance, but by lack of money printing, which of course goes directly to them.

So, you see, money printing is therefore good.  Make-work is good.  Abundance and falling prices are bad.  And overpopulation and resource depletion are just to be ignored until the entire system collapses, which won't ever occur anyways because money-printing and make-work always fixes everything and you're an "asshat" for believing otherwise.  So, pay no attention to the billionaires quietly off-shoring their wealth and resigning their banking jobs and purchasing villas in the countryside.  You're just unqualified and you don't understand real economic definitions, which are all very technical and boring anyways.

[DeathAndTaxes]

Ok. Inflation experts. Correct me if wrong.

Inflation is the rise in prices of products. This occurs two ways. The scarcity of the resource wanted increases with the demand for said resource. And/Or increase the money supply. (i.e. print more money)

Inflation can be one, either, or a combination of both.

Just how I see it. I maybe wrong though.

Generally speaking no. 

Scarcity of a product isn't inflation.  It simply is supply and demand.

One def on inflation is expanding monetary base.  Regardless of price of products if the money supply expands 5% you have 5% inflation.

Another def of inflation is a PERSISTENT RISE in GENERAL LEVEL of prices.  One product going up in price isn't inflation.  If all products (on average) are rising in price it isn't because of a rise in demand it is because the amount of money has expanded faster than the available goods & services.  Each unit of currency is worth less thus is requires more to get same amount of goods.

Scarcity driven price increases isn't inflation.  If a war with Iran broke out and oil spiked to $400 per barrel we wouldn't say we have 400% inflation.  Scarcity can drive prices up irregardless of inflation just as a lack of demand for a particular product can drive prices down.

The only "debate" on inflation is:
a) inflation = rate of monetary expansion

vs

b) inflation = rate of monetary expansion / rate of economic expansion

[cunicula]

Don't waste your time explaining. It is like speaking to a troop of monkeys. Your just going to get pissed on and hooted at. Best approach is to piss on them instead. It will help prevent the know nothings from falling into error.

The discussion is carrying on with civility and consideration, until cunicula shows up, and calls everyone monkeys who should be pissed on. I think the irony is perhaps lost on him?

Cunicula - though your economic reasoning is fallacious, and your demeanor is inappropriate at best and obnoxious at worst, I still refrain from calling you names and have never advocated urination as fitting punishment for you. If you'd like to debate the economics with us "libertarian austrian asshats" whom you loathe so mightily, please do. But stop the immaturity. Your untenable positions can be considered if dressed for the event, but if you're unable or unwilling to engage in proper discourse please go elsewhere.

Inflation, properly defined, is the degree by which the money supply increases. It is a useful metric unto itself irregardless of economic activity or other metrics. To claim that "GDP" and "prices" must be considered when strictly measuring inflation is to pervert the term beyond its useful definition. If you take umbrage with this statement, then please explain. I understand many contemporary economists use "inflation" to describe what is more accurately referred to as CPI figures, but many contemporary economists also think spending and consumption is productive behavior, so I'm skeptical of their prescience and take issue with their distortion of terminology.

I know you're not a monkey, so stand up for yourself and address the issue like a man or bow politely and find your way to the door.

Idiot, one does not 'debate' definitions. If you were not an idiot, then this would be clear to you already. Definitions are meant to make communication convenient. The rest of the world, including 99.9% of academic economists like me, and 99.9% of regular Joe's too, defines inflation as changes in the price level. If you prefer to use the asshat definition, so be it. What can I do if you decide that chocolate means cheese and are very obstinate about it? I certainly can't argue with you. Again, what an idiot you are. You certainly didn't learn this asshattery in school, which I suggest you go back to.

What term do academic economists like you use to discuss what his definition is?  If you don't have such a term, why is it ignored?

Mainstream economists call what asshats call inflation the growth rate of the money supply. I suggest you consult wikipedia:

http://en.wikipedia.org/wiki/Money_supply
http://en.wikipedia.org/wiki/Inflation

I'm more interested in talking about cryptocurrency and not interested in teaching economics for free. Teaching economics is not leisure for me. I am well-paid to do that in my day job and have plenty of opportunity to respond to student emails about stuff like this. Students are usually quite polite and reasonably intelligent, whereas the readership here is uneducated, insolent, and dull. If forum members start paying me US$2xx/hour, then it would be like executive education. The current forum situation is like exec ed without the fat paycheck. If the execs didn't pay big, then academics would piss on them, they wouldn't teach them. That is why I piss on the asshats here. If you would like to change that, then pay me like an executive would. I'll respond by politely educating the asshats instead.


For your question, I'll give you a reasonably thorough answer for 50 BTC upfront.

[JusticeForYou]

Don't waste your time explaining. It is like speaking to a troop of monkeys. Your just going to get pissed on and hooted at. Best approach is to piss on them instead. It will help prevent the know nothings from falling into error.

The discussion is carrying on with civility and consideration, until cunicula shows up, and calls everyone monkeys who should be pissed on. I think the irony is perhaps lost on him?

Cunicula - though your economic reasoning is fallacious, and your demeanor is inappropriate at best and obnoxious at worst, I still refrain from calling you names and have never advocated urination as fitting punishment for you. If you'd like to debate the economics with us "libertarian austrian asshats" whom you loathe so mightily, please do. But stop the immaturity. Your untenable positions can be considered if dressed for the event, but if you're unable or unwilling to engage in proper discourse please go elsewhere.

Inflation, properly defined, is the degree by which the money supply increases. It is a useful metric unto itself irregardless of economic activity or other metrics. To claim that "GDP" and "prices" must be considered when strictly measuring inflation is to pervert the term beyond its useful definition. If you take umbrage with this statement, then please explain. I understand many contemporary economists use "inflation" to describe what is more accurately referred to as CPI figures, but many contemporary economists also think spending and consumption is productive behavior, so I'm skeptical of their prescience and take issue with their distortion of terminology.

I know you're not a monkey, so stand up for yourself and address the issue like a man or bow politely and find your way to the door.

Idiot, one does not 'debate' definitions. If you were not an idiot, then this would be clear to you already. Definitions are meant to make communication convenient. The rest of the world, including 99.9% of academic economists like me, and 99.9% of regular Joe's too, defines inflation as changes in the price level. If you prefer to use the asshat definition, so be it. What can I do if you decide that chocolate means cheese and are very obstinate about it? I certainly can't argue with you. Again, what an idiot you are. You certainly didn't learn this asshattery in school, which I suggest you go back to.

What term do academic economists like you use to discuss what his definition is?  If you don't have such a term, why is it ignored?

Mainstream economists call what asshats call inflation the growth rate of the money supply. I suggest you consult wikipedia:

http://en.wikipedia.org/wiki/Money_supply
http://en.wikipedia.org/wiki/Inflation

I'm more interested in talking about cryptocurrency and not interested in teaching economics for free. Teaching economics is not leisure for me. I am well-paid to do that in my day job and have plenty of opportunity to respond to student emails about stuff like this. Students are usually quite polite and reasonably intelligent, whereas the readership here is uneducated, insolent, and dull. If forum members start paying me US$2xx/hour, then it would be like executive education. The current forum situation is like exec ed without the fat paycheck. If the execs didn't pay big, then academics would piss on them, they wouldn't teach them. That is why I piss on the asshats here. If you would like to change that, then pay me like an executive would. I'll respond by politely educating the asshats instead.

18pzKT6PzJZKZ6RtBa1D9LZQxb5z1Dbwm7

For your question, I'll give you a reasonably thorough answer for 50 BTC upfront.

I have sent you 1 BTC for your time and educational prowess. But meh... what do I know about making money. I'll leave it to you experts.

[cunicula]

Ok. Inflation experts. Correct me if wrong.

Inflation is the rise in prices of products. This occurs two ways. The scarcity of the resource wanted increases with the demand for said resource. And/Or increase the money supply. (i.e. print more money)

Inflation can be one, either, or a combination of both.

Just how I see it. I maybe wrong though.

Scarcity driven price increases isn't inflation.  If a war with Iran broke out and oil spiked to $400 per barrel we wouldn't say we have 400% inflation.  Scarcity can drive prices up irregardless of inflation just as a lack of demand for a particular product can drive prices down.

FYI. The above is asshattery. Consult a macroeconomics textbook like a normal student. Don't
"learn" from poorly informed morons.

[benjamindees]

the growth rate of the money supply.

Right, of course I forgot the small detail that banks don't print money.  No, it magically grows all by itself.  Pay no attention to the man behind the curtain.

[miscreanity]

Generally speaking no.  

Scarcity of a product isn't inflation.  It simply is supply and demand.

One def on inflation is expanding monetary base.  Regardless of price of products if the money supply expands 5% you have 5% inflation.

Another def of inflation is a PERSISTENT RISE in GENERAL LEVEL of prices.  One product going up in price isn't inflation.  If all products (on average) are rising in price it isn't because of a rise in demand it is because the amount of money has expanded faster than the available goods & services.  Each unit of currency is worth less thus is requires more to get same amount of goods.

Scarcity driven price increases isn't inflation.  If a war with Iran broke out and oil spiked to $400 per barrel we wouldn't say we have 400% inflation.  Scarcity can drive prices up irregardless of inflation just as a lack of demand for a particular product can drive prices down.

The only "debate" on inflation is:
a) inflation = rate of monetary expansion

vs

b) inflation = rate of monetary expansion / rate of economic expansion

Finally, some clear reasoning.

Ratios represent a relation between distinctly separate values, so inflation and deflation don't apply; only the components of a ratio change. Even comparing ratios breaks down to relative comparisons between the discrete components.

A ratio is derived from axiomatic elements; it is not itself an axiom.

With b) - if the money supply grows at the same pace as the economy, monetary inflation is still occurring. If the general price level gradually rises, monetary inflation is also still occurring. If the general price level gradually falls, but the economy is growing, monetary inflation may still be occurring - just at a slower pace than economic expansion.

A table may make the visualisation easier:

>Money Supply	>Economic Growth	>Result
100	100	Start
200	100	Monetary Inflation (Pure)
120	110	Monetary Inflation + General Price Increase
110	200	Monetary Inflation + General Price Decrease
90	100	Monetary Deflation + General Price Decrease
100	90	Monetary Stability + General Price Increase
50	50	Monetary Deflation + General Price Stability
200	200	Monetary Inflation + General Price Stability

This all takes place within one coherent system no matter how many components there are. It bears repeating: in every example above, both the money supply and economy exist in one complete system. Some people seem to be confused about absolute and relative values. An algebra refresher may be beneficial.

[cunicula]

I have sent you 1 BTC for your time and educational prowess. But meh... what do I know about making money. I'll leave it to you experts.

Thanks for the tip. In recognition of this, I will point out that this statement written by D&T is wrong:

"Scarcity can drive prices up irregardless of inflation"

Inflation is a change in the price level by definition (the commonly accepted economics textbook version). A oil price shock, for example due to war in the Middle East, will cause inflation.

[benjamindees]

b) inflation = rate of monetary expansion / rate of economic expansion

With b) - if the money supply grows at the same pace as the economy, monetary inflation is still occurring. If the general price level gradually rises, monetary inflation is also still occurring. If the general price level gradually falls, but the economy is growing, monetary inflation may still be occurring - just at a slower pace than economic expansion.

Just as I said, this is by design.  There is no rational reason for inflation to be defined as a ratio; it is imprecise.  We aren't measuring some nebulous physical property like momentum or quantum spin.  We're measuring the number of dollars created by the US government and the Federal Reserve.  They know how many there are.  The only reason to define inflation as a ratio is to hide the fact of money printing, which ironically occurs in every one of your examples, within the much larger category of general economic growth.  Completely by design.  Monetary theft, hidden in plain view in the very definition of the words used to describe fundamental economic concepts.  And, if you try to separate them to make proper sense of things, you're an "asshat".  Or you're an uneducated yokel or whatever.

The same thing occurs in other industries, of course, so it's nothing new.  "Ground beef" is defined to contain some percentage of ammonium hydroxide disinfectant in order to hide the fecal matter included by the use of mechanical separation.  "Milk" is defined to contain some percentage of blood and puss in order to hide the use of automatic milkers.  Varietal wines are defined to contain some percentage of lesser varieties in order to hide blending.  Corn syrup is defined to contain some percentage of pesticides in order to hide the use of GMO seed.  "USDA Choice" beef is defined to contain a certain percentage of fat marbling in order to hide the use of corn feed.

The difference, of course, is that in the banking industry, the 2% per annum money-printing hidden in the accepted definition of "inflation", over the course of a hundred years, means that bankers end up owning 90% of everything.  By design.

[miscreanity]

The amount earned by "bankers" depends on the spread between the interest rate the bank borrows money from the central bank at and the interest rate given to household depositors. This depends on competition between banks and the regulatory environment. In some countries like China, where banks are state-owned and gov't controlled, the spread is very large. This can legitimately be viewed as expropriation of household savings. This is clearly bad. We do not want the spread to be too high. In other countries, where entry into banking is less stringently controlled (e.g. the US), the spread is much smaller. We do not want the spread to go to zero through complete deregulation and excessive competition. A falling spread decreases bank profitability and increases the risk of bank failure / financial crisis.

Risk of failure is part of competition. Asshat.

P.S. Algebra.

[cunicula]

The amount earned by "bankers" depends on the spread between the interest rate the bank borrows money from the central bank at and the interest rate given to household depositors. This depends on competition between banks and the regulatory environment. In some countries like China, where banks are state-owned and gov't controlled, the spread is very large. This can legitimately be viewed as expropriation of household savings. This is clearly bad. We do not want the spread to be too high. In other countries, where entry into banking is less stringently controlled (e.g. the US), the spread is much smaller. We do not want the spread to go to zero through complete deregulation and excessive competition. A falling spread decreases bank profitability and increases the risk of bank failure / financial crisis.

Risk of failure is part of competition. Asshat.

P.S. Algebra.

I expect some compensation if asked to provide further education for idiots like these that populate the thread.

[miscreanity]

Congratulations are due to cunicula for already winning the 2012 Troll of the Year award.

[blablahblah]

Oh cunicula/Paul Krugman/whoever you are, I'm afraid there is no cure for you.

Idiot,

99.9% of academic economists like me

Pot kettle black? Am I being too harsh towards other academic economists? Or did you mean that almost all academic economists like (as in "admire") you?

one does not 'debate' definitions.

A person whose mind is free, is able to define things for herself, for convenience and ease of communication and things like that.

However, since you seem determined for follow "the one, correct definition, as prescribed by a higher power", by the power vested in me as the mighty Original Poster, for the purposes of discussion within this thread, I hereby define inflation to be "expansion of the money supply".

Now, no "buts", no backtalk. After all, a great academic economist once said:

one does not 'debate' definitions.

[lonelyminer (Peter Šurda)]

Idiot, one does not 'debate' definitions.

Yet, your objection to the Austrian definition of the money supply is your main argument in this thread:

The asshats obstinately define inflation as the absolute growth rate of the money supply.

Definitions are meant to make communication convenient.

However, communication is not neutral, it adapts to the goals of the people engaged in communication.

The rest of the world, including 99.9% of academic economists like me, and 99.9% of regular Joe's too, defines inflation as changes in the price level.

For example, this definition is more suited for the goals of expanding the power of the state. It diverts attention from a particular source of an increase of the price level, the increase in the quantity of money and its consequences: the redistribution of wealth and in case of credit expansion, fuelling of the business cycle. This increase would be much more difficult (according to some Austrians, for example Hülsmann, deSoto or Schostak, impossible), without the force exhibited by the state in violating the property rights of the holders of money, for example legal tender laws or privileges of the banks.

What can I do if you decide that chocolate means cheese and are very obstinate about it? I certainly can't argue with you.

Indeed, the objection that your opponents use different definitions is unscientific. However that does not prevent you from whining and bitching.

You have made several reasonable comments throughout your posts. It is sad that it is overwhelmed by childish behaviour and logical fallacies manifested in the rest of the posts.

[lonelyminer (Peter Šurda)]

The amount earned by "bankers" depends on the spread between the interest rate the bank borrows money from the central bank at and the interest rate given to household depositors.

You neglect to mention the obvious, that this is only possible through a legal privilege which banks are granted by the state. Normal people are not permitted to obtain central bank deposits. Also you neglect to mention the credit function of banks, i.e. that their income is also increased by the interest charged on loans they grant.

We do not want the spread to be too high.

This is one of my favourite rhetorical instruments, the royal "we". It is just another sign of arrogance, in addition to demanding money for patronising and feeding stuff noone is interested in.

You mentioned previously that definitions are meant to make communication convenient. Well, I'm pretty sure that your "communication" has helped a lot of people to conclude what definition you fit in.