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You may be surprised to discover that in spite of the best efforts of our monetary authorities and political leaders – that is, those we appoint and elect to defend our dollar – there is no inkling about the cause of the current inflation. I share with you the mysteries revealed by interviews with prominent regulators and politicians.

Joseph Schumpeter, prominent monetary economist with the Federal Reserve Board confesses he does not know the cause of the current 5 percent inflation rate and the 10 percent he fears is on the way. Trying to form a committee of the leading money regulators to unravel this mystery, Dr. Schumpeter confesses his efforts are impeded by the demands on his time from QE1 and QE2 which currently require the Fed to print and buy $120 billion of Treasury debt and mortgage-backed securities every month.

Étienne Laspeyres, currently on the Federal Open Market Committee which augments and leverages the effects of Fed activities, says that while he knows how to measure inflation he is at a loss to explain its fundamental causes. Dr. Laspeyres says he will explore the issue later but is temporarily too busy keeping interest rates low so banks and businesses can borrow and buy.

You will not be surprised to learn that your political leaders are equally stymied. Alice Antoinnette, long-time member of congress, declares that discovering the cause of inflation, while important, can wait because there is a more urgent issue: To make up for the trauma of the past inflation, we need to print more money and pump it into the pockets of the populace so it can maintain its standard of living. Unmoved by the plight of those on fixed incomes who are priced out of the market for staples like bread she says “Let them eat brioche!”

Lois Ellert, newly elected to the legistlature with an overdrawn bank balance and $100,000 of student debt is not sure if inflation either exists or is such a bad thing.     Noting that the price of lumber has leapt 30 percent but the price of lentils lingers up only 5 percent, she says this is not inflation but price adjustment. Since the price of limousines has climbed 25 percent but the price of horse-drawn vehicles has remained flat, she concludes that what is occurring is a change in price structure.   And what really persuades her that there is no inflation is that the price of copper year to date has risen 28%, but the price of asbestos has gone negative; some people will actually pay you to take away their asbestos.   According to the Ellert Law of Economics, the term “inflation” is appropriate only if, when the price of lemons rises 7 percent, the price of lentils also rises 7 percent.

Even if, in the unlikely event there is such a thing as inflation, Ms. Ellert thinks it might have the beneficial effect of correcting the inequities in our society.   She would use stimulus payments so the high-school dropout could match the income and wealth of the medical researcher; “and Dr. please stop wasting your time counting money and speed your efforts to cure cancer.” She would count on inflation to eat away at the accumulated wealth of the entrepreneur who gives us electric cars; “stop innovating because you hope it will make you rich and do it because it might be good for the environment.” And for those who want to dig deeper and deeper into the atom and those who want to probe the planets she would say “Transform the universe even more than what has happened the last century or two and we might or might not let you keep your rewards.”

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