Comments on: Grandmaster Ken Rogoff gets his rocks off

By: conrad

conrad — Sun, 07 Dec 2008 20:16:21 +0000

“and Hong Kong through the crash of 97-99 and the SARS recession in 2003″

Maybe this wasn’t the most fun time on Earth, but it wasn’t the worst either — at least in HK, people got to the other side and created yet another bubble in the way that HK does so well. To me what this shows is that deflation is not as bad as everyone seems to imagine, and quite possibly not as bad as high inflation (compare having interest rates of 10%+ with declining asset prices).

By: murph the surf

murph the surf — Sun, 07 Dec 2008 12:06:53 +0000

“Even a passing familiarity with history demonstrates that such discussions are thoroughly pointless”
Yea I’ll have to remind the japanese that 19 years of deflation and crushed asset prices is the best choice they had.
And outsize inflation – all of 6% when we had what 4.5 % just a few months ago – well that was terrible wasn’t it?
I wouldn’t object , I’d actively support stoking up a bit of inflation if that was possible as a pleb.
The useless spending on major infrastructure that greased the wheels and poured into the coffers of the supporters of the LDP worked a treat didn’t it? Hey whats 2 billion for motor dealers and untold more for the corrupt NSW ALP?
Eddie Obeid and Joe Tripodi must wonder when the usefulness of useful idiots runs out- I sure do.
And just in case you are wondering I lived in Japan during the asset bubble and Hong Kong through the crash of 97-99 and the SARS recession in 2003.And I am a big fan of Volker – when every so called expert was ready to write off the rest of the world his analysis was spot on
Deflation is the new word no-one wants to mention but it is right on top of all of us and needs extreme action to be repulsed.

By: Ken Lovell

Ken Lovell — Sun, 07 Dec 2008 09:06:46 +0000

He may not be proposing hyper-inflation but anyone who believes he can organise a ‘period of outsize inflation’ and then coax the genie back into the bottle when he’s finished is really having a loan of himself.

As to ‘better than the alternative’ – I’m too old to engage in arguments based on deductive reasoning or intuitive conclusions about what will happen if we don’t do X. Even a passing familiarity with history demonstrates that such discussions are thoroughly pointless.

By: Nicholas Gruen

Nicholas Gruen — Sun, 07 Dec 2008 08:00:03 +0000

Ken,

I’m not trying to defend the proposal, but if you want to attack it you need to tell us more than what you object to about it.

Rogoff is arguing that what he’s suggesting is better than the alternative – which on his analysis is, I presume paralysis in financial markets, perhaps for many years and the associated depressed or negative growth to go along with it. That won’t be too popular with anyone much including self-funded retirees. And he’s not proposing hyperinflation.

By: Ken Lovell

Ken Lovell — Sun, 07 Dec 2008 05:36:49 +0000

Am I missing something, or isn’t a ‘period of outsize inflation’ just a way of transferring the consequences of imprudent borrowing from those in debt to those with savings? While I can understand why the debt-laden would like me to take some of their burden on my own shoulders – or even just share their misery – I’m afraid I would object strenuously to such a grossly unfair exercise in public policy.

Maybe we can have a Weimar-style period of hyper-inflation that wipes out debts and savings alike and leaves us all equal, except that the people who own assets they acquired with debt will still have them and those who refrained from going into debt will have: nothing. It might be an elegant economic solution but fortunately I don’t see it being very popular with our unsung heroes the self-funded retirees, who seem pretty much to dictate government policies these days no matter which party is in power.