What if everything you’ve learned about inflation is wrong?
The Inflation Myth and the Wonderful World of Deflation illustrates our rapidly changing world where constant technological innovation leads to cheaper and better products. These changes are no longer reflected in the ways we measure inflation. Renowned investor and author Mark Mobius persuasively argues that what we believe to know about inflation today does not reflect the reality any longer. It is a myth, a legend, a fable, and, yes, a falsehood for a number of reasons.
The Inflation Myth and the Wonderful World of Deflation tackles a number of fascinating topics, including:
- The political nature of inflation measurement where governments manipulate and exploit inflation numbers to fit their economic programs
- The extreme difficulty involved in gathering accurate data to measure inflation and the resulting inaccuracy of those measures
- The error of using currencies to measure inflation when those currencies are continually being debased by the governments who issue them
- Finally, and most importantly, the advances in technology and automation which are leading to continuously falling costs for goods and services
Perfect for anyone with even a passing interest in macroeconomic phenomena or government policies, which are significantly impacting people's everyday lives around the world, The Inflation Myth and the Wonderful World of Deflation provides a remarkably compelling and provocative view of stunning originality.
Table of Contents
Preface xi
Introduction xv
Acknowledgments xxiii
About the Author xxv
1 History and Inflation 1
History as Inflation
Importance of Inflation Numbers
The Long Coffin
Marco Polo and Money
Gold and Silver Coins
Money and Trust
The Urge to Debase
Rome’s Debasement
England’s Debasement
Shells and Money
2 The Critical Importance of Inflation Numbers 21
Making Important Policy Decisions on
Inflation Data
International Interest in Inflation
The Influential Measure
Impact on Individual Lives
The Popularity of Inflation Numbers
India Stops Futures Trading To Influence Inflation
China’s Efforts To Influence The CPI Numbers
The Effect of Mexican Tomatoes On Inflation
Venezuela Attempts To Rein In Inflation Through
A Cryptocurrency
Fed Up
Inflation Numbers Knock-on Effect
Wage indexing
When Central Bank Actions Fail To Influence
Inflation
Investment Decisions and Inflation Numbers
Bank Decisions
3 What is Inflation? 37
What the Experts Say
Defining Inflation
Inflation as a Worldwide Disaster
4 What is Hyperinflation? 53
What the Experts Say
Hyperinflations around the World
The German Hyperinflation Experience
Yugoslavia: Printing Money To Pay
Government Debt
Legalized Looting In Zimbabwe
Printing 30 Tons of Zairean Banknotes
5 Money Supply and Inflation 67
Inflation as a Monetary Phenomenon
What Is The Money Supply?
Measuring Money Supply
Money Creation through Fractional-Reserve
Banking
The Money Illusion
Credit Is Money
The Collapse of Paper Money
Demise of the Dollar
The Gold Standard
The Universe of Cryptocurrencies
6 Measuring Inflation 85
Why You Can’t Trust the Inflation Numbers
The History of Measuring Inflation
Building the Index
Gin and Inflation Measurement
The Boskin Commission
US GDP Numbers Questioned
What Are People REALLY Buying?
The Changing Time and Place Bias
Market-Basket Bias
Data Gathering Difficulties
Complexity
Data Gathering
Currency Change Differences
Currency Confusion - The Tenge
Pakistan Statistics Concerns
China’s Suspect Statistics
UK Inflation Index Credibility
India - Data Gathering Difficulties
The Brazil Experience
Urban-Rural Inflation Differences In China
Inflation Differences Within Turkey
Malaysia Concerns
South Africans Skeptical Too
Income Differences
What Statistics Fail to Measure
7 Controlling and Manipulating Inflation 125
Governments’ Vested Interest
Central Banks Control Attempts
The Phillips Curve
The Taylor Rule
The Fisher Effect
Inflation Targeting
The Magic 2%
The Low Inflation Trap
Argentina: Lies, Damned Lies
Brazil Anti-Inflation Efforts
Chinese Government Efforts to Control Inflation
Philippines Data Control
Venezuela - Eliminating a Bill
India Control Efforts
Korea: Consumer Pressure
8 The Wonderful World of Deflation 155
What the Experts Say:
The Trend towards Lower Prices and Rising
Incomes
Food and Gold
Productivity and Deflation
Technology and Deflation
Deflation is Next Door - Singapore and Malaysia
Prices
Deflating the World’s Fair
Linking Income and Costs
Deflation Statistics
US Deflation
Singapore Deflation
Japan Deflation
India Deflation
China Deflation
9 Conclusions 195
References 199
Index 211
