Inflation is not rising prices. It is an increase in the quantity of currency that results in merchants, service providers, and everyone requiring more dollars in return for what they provide. 

If inflation is an increase in the quantity of currency, deflation is a decrease in its quantity. It will result in currency becoming more valuable with prices going down. But the government and the Federal Reserve are not decreasing the amount of currency; the nation is actually being inundated with freshly printed dollars whose decreasing value will soon be universally recognized. Deflation is not occurring.

Numerous economic commentators have noticed a decrease in the prices of some items such as automobiles, luxury goods, large appliances, etc. They wrongly identify this phenomenon as deflation. What has occurred, however, is a contraction of spending on the part of the consuming public. With the economic downturn impacting the people – job losses, no pay increases, lost value of stock holdings, and more – most have wisely cut back on purchasing. Government leaders have chosen to treat this problem by sending a check to most Americans claiming that doing so will spur a buying spree, thereby reversing the downturn. 

But any jump in purchasing will amount to a small upward blip that will soon disappear.  In effect, our leaders are taxing the American people to give them some of the money taken from them. This is not only ridiculous, it compounds the problem facing the nation because it involves creation of a great deal more new currency. In other words, they will treat the problem that is wrongly called deflation with a surge of inflation.  

The sensible reluctance on the part of the public to spend money during a recession has left car dealers and others with large inventories that aren’t moving. Hence, many have lowered their prices in hopes of enticing buyers to make purchases. But the American people aren’t responding. As a result, numerous auto dealerships have gone out of business, some national retail chains have closed their doors, and both office and retail space can more easily be found where previously it had been difficult to obtain. 

The results of the economic downturn are visible virtually everywhere. But the nation is not experiencing deflation.  Believing that it is will lead to false and even dangerous remedies. What our nation needs is sound money whose value can neither be inflated nor deflated. 

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MarkGlen said:

Money and production Money should match production: When money is put into the economy with no matching increase in production the money looses some of its value. And on the other end when money in circulation is less than production money will become more valuable, because prices will come down due to lack of spending. In the early days of America bead manufacturers were careful not to have too many beads chasing to few indians, for it was difficult trying to trade beads to an indian for pelts if he had a bushel basket full already.

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January 26, 2009 | url
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MarkGlen said:

Money and Production #2 In the early days of America bead manufacturers were careful not to have too many beads chasing to few Indians, for it was difficult trying to trade beads to an Indian for pelts if he had a bushel basket full already In other words, money should match production: When more money is put into the economy with no matching increase in production the money looses some of its value. And on the other end when money in circulation is less than production money will become more valuable, because prices will come down due to lack of spending.

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MarkGlen said:

Article one section 8 of the U.S. Constitution The best monitary system is one that is closely managed by a Congressional committee. The committee should report to the full House every six months or regularly. And if the committee spots a problem it could use brief measures to right the problem until the right one is found. That way the committee could learn everything, by trial and error, that it needs to know in order to manage the nation's monitary system efficiently. What do you all think?

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RichardR369 said:

	Monitoring I thought the feds were supposed to be monitoring the situation to adjust monetary supply?
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January 27, 2009
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MarkGlen said:

Keynesian Economics The method the "feds" and our federal government are using is called keynesian Economics. It doesn't work and never has. They need to try another method as I hope a congressional committee would, that is when we get a committee again like our founding fathers intended. The Federal Reserve System (Fed) is federal in name only and it handles the banking industry in this country. Congress is suppose to manage our monitary system. But, as it is now when congress spends money for bailouts, stimulus money and etc. that money is borrowed from a private banking system (the so-called Federal Reserve)) at a rate of interest and we tax payers pick up the tab through taxation. If congress controlled the money then there would be no interest to pay when Congress spent money.

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January 27, 2009 | url
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MarkGlen said:

	Present Congress has no sense If congress were to go back to the constitutional monetary system that would mean congress would have a majority, in congress, that would be honest, honest enough to be trusted to handle our money.
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January 27, 2009 | url
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MarkGlen said:

	A hands on approach Article one Section 8 of the U.S. Constitution says, in part: Congress shall be intrusted "To coin money, regulate the value therof...". I say Congress cannot regulate the value of money unless it uses a hands on approach. What do you all think?
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January 28, 2009 | url
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MarkGlen said:

	Libertarian concept versus Law The Libertarian approach to money will not work. I think Congress is going to have to manage the money to a certain degree. What do you all think?
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