[quote=cheesehead;158097]Actually, there was a sharp upturn about 1917, not 1913. Neither graph shows any change in the debt line at 1913.

Does the year 1917 ring a bell? World War I?

The onsets of preparation for war have always been accompanied by sharply increased government expenditures, and, thus, sharply increased deficits and debt.[/quote]

Well there were wars before (Civil War, ...) and you didn't see spikes in that region. The WW1 was the original reason for that but the FED made it possible and after the WW2 there weren't any more World Wars and the inflation still exploded.

The inflation started delayed. The created the FED in the Dec. 1913 so you don't think that they started right away ... that would be too obvious.

[quote=joblack;158255]Well there were wars before (Civil War, ...) and you didn't see spikes in that region.[/quote]The second chart, titled "United States National Debt" "1791 to Present" and labeled "Figure 2", on the page at the second link that YOU posted ([URL="http://www.cedarcomm.com/%7Estevelm1/usdebt.htm"]http://www.cedarcomm.com/~stevelm1/usdebt.htm[/URL]) clearly shows an upswing at the start of the Civil War -- from just under 100 million in 1859 to roughly 2-3 billion just after the war.

You can even see the bump during the U.S.-Mexican War (1846-1848).

[U]This is on a chart that YOU posted the link for[/U]! Don't you check the references you yourself present? :)

[quote]The WW1 was the original reason for that[/quote]That's the sort of erroneous conclusion you draw [U]when you don't pay attention to your own source data[/U].

Once again, it seems like your desire to blame the Fed overrode your own vision of what was right before you!

You're not going to convince anyone to accept your theory when you keep posting evidence that contradicts it, so maybe you ought to consider following the evidence to a more correct conclusion.

- - -

BTW, where's the data supporting your claim that the Fed supports inflation? "National debt" isn't a synonym for "inflation". An upswing in national debt and an upswing in inflation are two different things. We've had an enormous upswing in U.S. national debt during the past 7 years, but inflation has been low throughout that time. Do you claim that it was the Fed that caused the enormous increase in national debt during the Bush administration? If so, why didn't it cause inflation to rise?

[QUOTE=joblack;158059]Check out the national debt graph of the USA
[/QUOTE]

So about $30,000 for every man/woman/child.

$457B in Canada / 35M people = about $13,000 each.

Though ours has actually gone down since 1996 (about 102B or 18%).

Count me as one who would be willing to pay our $26,000 share (wife and I) up front on the condition Federal Government agrees to NO LONGER charge me federal taxes (of any kind)....not that it would ever happen.

And another 7B Provincial debt = $7,000 each. So we pay another $14,000 and be free of Provincial debt....wishful thinking.

$40,000 up front and NO MORE TAXES.... if only!!!!!!

Petrw1, note that we got cheesehead to admit that perhaps the Fed is part of the problem rather than the solution [url=http://www.mersenneforum.org/showthread.php?p=158313#post158313]over here[/url] - he just needed some rational arguments in order to be convinced, which is entirely proper.

[QUOTE=cheesehead;158281]BTW, where's the data supporting your claim that the Fed supports inflation? "National debt" isn't a synonym for "inflation". An upswing in national debt and an upswing in inflation are two different things. We've had an enormous upswing in U.S. national debt during the past 7 years, but inflation has been low throughout that time. Do you claim that it was the Fed that caused the enormous increase in national debt during the Bush administration? If so, why didn't it cause inflation to rise?[/QUOTE]

National debt may not be exactly synonymous with inflation, but the same conditions that allow a country to run chronic account deficits invariably lead to inflation in one form or another, if not now then later down the road. And once a government has established (by deifnition perfectly legal) means to monetize debt, the temptation to abuse the privilege will always be there. Think Reaganesque "deficits don't matter".

Also, your characterization of the past 7 years is misleading - sure, the CPI in the narrow gerrymandered way the government chooses to measure it has been "tame", but look what happened to housing prices during that time. Is housing becoming grossly unaffordable not a form of inflation? Are loose credit and consumers being encouraged to spend based on inflated paper valuations of their newly-purchased bubble houses not inflationary? You have to look beyond the made-up CPI numbers (which among other things presume that that new PC you purchased is implicitly worth far more than the one it replaced because it has a faster processor - a.k.a. "hedonic adjustment") - Austrian economic theory defines inflation as an increase in money supply and credit. The Fed completely ignored that version of inflation until last year, and then Bernanke et al spent months blathering about "concerns about inflation" just as the very opposite - a massive deflationary decrease in nominal asset values and credit - was getting rolling.

And while the current economic picture is highly deflationary, the Fed, having utterly misdiagnosed the disease, is trying to cure it via more of the same thing - excess credit - that caused it. where do you think those trillions of dollars the Fed has added to its balance sheet in the past year - and the trillions more which are going to get added in the next few years by way of multiple, massive misguided "stimulus packages" - are coming from? And once they are in the system - even if at present mostly in the form of money added to banks` balance sheets which said banks are currently unwilling to lend out, for good reason - do you think they're going to be easy to take back? Nope - the Fed, rather than helping to fix anything related to the current problem, which is a massive speculative asset bubble that needs to deflate, painful though that process is, is in fact sowing the seeds for another bout of inflation and bubble-omics down the road. Part of that is due to the fact that once they are in existence, government institutions like the Fed justifiably feel they need to be seen as "doing something". Simply letting the dotcom bubble (coupled with the 9/11 economic fallout) pop and the economy go through a few years of painful readjustment wouldn't do, so Greenspan flooded the system with EZ money and fueled an even bigger bubble by far. Now that that one has also popped, predictably in much more painful fashion, there is even more pressure to "do something", and I suspect the attempted desperate-remedies cure is once again only going to make things worse. Hold on to your gold fillings, folks - you might them to buy food with in a few years.

I'm prepared to adjust my opinions upon seeing sufficient evidence. (But pseudo-evidential presentations or claims rile me.) I've done so before, and I'll do so again ... though I recognize that it's taking longer for such adjustments to "take" nowadays.

(Example: I'm preparing to start accepting offers of senior discounts without asking about the age limit, but suspect that I'll still sometimes reflexively ask, "How old do I have to be to be 'senior'?" for a while.

AARP, annoyingly, put me on their solicitation mailing list back when I was [I]30[/I], for some reason.

Hmmm ... maybe the senior llimit is llower for llamas ... I never thought of that before ... maybe I [I]have[/I] been elligiblle allll this time!)

[quote=cheesehead;158281]
Once again, it seems like your desire to blame the Fed overrode your own vision of what was right before you!
[/quote]

There is also no proof NOT to blame the FED. The FED is creating the money (a.k.a. US-Dollars) and is (indirectly) responsible for the inflation.

There are (small) spikes before 1917 but in relation to the actual inflation it´s not worth to mention.

Unfortunately there is no direct proof that another central bank system would have a better effect in the USA but other countries like Switzerland show a different approach (better education, better health care system, ...).

So, who´s judgment is fogged?

[quote=joblack;158487]There is also no proof NOT to blame the FED. The FED is creating the money (a.k.a. US-Dollars) and is (indirectly) responsible for the inflation.

< snip >

Unfortunately there is no direct proof that another central bank system would have a better effect in the USA but other countries like Switzerland show a different approach (better education, better health care system, ...).

So, who´s judgment is fogged?[/quote]Let's see ...

1) You state that there is no proof not to blame one central bank system for something.

2) You state that there no direct proof that any other central bank system would have a better effect.

3) You don't retract your assertion that the Fed is to blame.

and then you ask whose judgment is fogged?

That's funny. :-)

Number 1 doesn't imply that the central bank system (the Fed, in particular) [I]is[/I] to blame, so doesn't support your argument that the Fed is to blame.

Number 2 implies that you know of no direct proof that there is any better system than the Fed, so it, too, fails to support your argument that the Fed is to blame (rather than show that [I]any[/I] system would be to blame, perhaps because inflation is not caused by the type of central bank system).

You seem to have answered your own question.

So, what is your point?

- - -

[quote=joblack;158487]There are (small) spikes before 1917 but in relation to the actual inflation it´s not worth to mention.[/quote]Actually, in that second figure graph, I can easily see that the Civil War spike [I]is[/I] noticeably larger, relative to the pre-war debt, than either the WW1 or WW2 spike. It spans about 1-1/2 of the logarithmic intervals, whereas the WW1 spike is only a bit larger, if any, than one interval, while the WW2 spike is less than one logarithmic interval (= factor of 10).

(I hope you understand why the logarithmic scale is more appropriate than the linear scale for this sort of thing.

For instance, consider three jumps: one is 15%, one is 10%, one is 8%. The 15% jump is the largest in terms of how it affects the situation at the time it occurred. Suppose the bases from which each jump occurred are 10, 1000, and 10000, rspectively. Then the absolute magnitudes of the jumps are 1.5, 100, and 800. But that doesn't change the fact that the 15% jump, [I]at the time it occurred[/I], was a greater disruption of the pre-jump situation than were either the 10% or 8% jumps. [I]That's why we use percentages for stuff like this![/I])

- - -

I could be convinced that the Fed is to blame for inflation IF you presented enough sound evidence that doesn't contradict what you claim. But you keep making statements that are contradicted by the charts YOU presented to support your argument, supposedly!

[quote=cheesehead;158531]Let's see ...

1) You state that there is no proof not to blame one central bank system for something.

2) You state that there no direct proof that any other central bank system would have a better effect.

3) You don't retract your assertion that the Fed is to blame.

and then you ask whose judgment is fogged?

That's funny. :-)
[/quote]

That's not right. I wrote that there is no direct proof because you can't go back in time, change one variable (another central system) and see if it works out differently in America.

You can compare your system with other central banks and most of the countries have a better (=lower) inflation rate and less (state) debt. You will certainly say you can´t compare the two countries because they are different in ...

I surely don't retract my 'assertion' that the FED is to blame.

The FED is creating the money so it is responsible for the creation of inflation. If you compare it with different other countries (like Germany or Switzerland) you can see that there are laws to prevent an excessive inflation scenario. Additionally the central banks in that countries aren´t in the the hand of private investor banks. Coincidence?

You don´t have to be a rocket scientist to be suspicious ...

The strong hypothesis is that the FED is mainly responsible for the situation of the USA today.

I´m amused because you seem to believe that the inflation is coming from god or another divine creation instead of searching for a 'scientific human reason'.

A comment to your writing style:

Obviously I´m not your student (and there is no hierarchy between us) so don´t react like 'professor knowitall' ...

[quote=joblack;158667]A comment to your writing style:
[/quote]My writing style has been the same for years in discussions with many folks. Ask other long-time forum members, or browse my oldest postings, if you don't believe that. I write in different manners in different situations and moods. If you don't want to see a "knowitall professor" style, the simplest method is to stop interpreting mine as such and get on with the topic of discussion.

- - -

Are you willing to acknowledge the truth of what I've said about the Civil War spike on the logarithmic graph YOU presented us?

[QUOTE=cheesehead;158762]My writing style has been the same for years in discussions with many folks. Ask other long-time forum members, or browse my oldest postings, if you don't believe that.[/QUOTE]

Yes, we old-timers like to refer to Richard's style merely as being one of great "pedantic prolixity." :razz:

[quote=ewmayer;158765]Yes, we old-timers like to refer to Richard's style merely as being one of great "pedantic prolixity." :razz:[/quote]
Indeed, but it helps if you don't rise to the bait.

David