Recently, I posted on this blog a response to C, who wondered why we do not have much inflation as a result of Quantitative Easing (QE), government increasing the money stock. Here was my response to C. Thanks to what E says, see below, I can now offer a much better, more full, answer. I am grateful to E’s response
Sent: Thursday, July 11, 2019 1:52 PM
Subject: No price inflation says C – oh yeah!
“WHY, with all the QE since 2008, has price inflation NOT kicked in massively?”
In addition to your logic and theoretical response, here’s my seat of the pants answer: Who says it hasn’t?
I wonder where C has been buying stuff. I use Quicken to track all my purchases, going back years. I can see how much prices for my own products and services (internet, utilities, insurance, etc.) have grown and I would say there’s been a good deal of price inflation. I’m not sure what “massive” means, but I just got my car insurance bill, and it’s up 10% in 6 months, and does so every renewal. I’m sure we’ve all experienced much the same.
Also it’s pretty clear that the government has changed the way they calculate the CPI, and it’s to their advantage to lie – less increase in SS payments for example.
So, I believe the empirical evidence demonstrates a different conclusion than that of C.
Regards, E5:36 pm on July 11, 2019 Email Walter E. Block