Bernie Sanders Fed Audit (prepare yourself to be ticked off)

[JDPriestly]

200. It depends, seems to me. If you increase the number of dollars and at the same

time, productivity increases, then prices which are defined as the value of goods in terms of money might stay the same or even become lower.

If you produce ten ears of corn in year one with each ear selling to the consumer for $1.00 and then you produce 20 ears of corn in year two with each ear costing the same to produce, the corn might be sold to the consumer for only 50 cents, assuming that the number of buyers for ears of corn remained the same.

I think that it isn't a matter of the dollar having an absolute value that can be threatened if more dollars are printed (although that is one possibility) but rather of the availability of dollars to express market values -- supply and demand values.

The mistake people make is to think of the dollar as having a static value. It doesn't. Money is the symbol for the flow of energy, of work, of resources and of goods. Money is just a symbol. Increasing the money supply way out of proportion with the increase of productivity is a problem.

But compare the cost of a PC now and 20 years ago. There is a huge difference. Part of it is because the labor is being very poorly paid, but part of it is because the process for making PCs and the amount of resources and materials required to produce one have been drastically reduced.

So the Fed could increase the money supply and you might be able to generally predict inflation, but it would not necessarily be true -- especially in this age when everything is being produced and marketed more efficiently and more cheaply.

The recession brought price deflation, not price inflation.