Earlier we posted a video of gold advocate Peter Schiff getting destroyed on Larry Kudlow’s show while talking about inflation, and when it might come.
Schiff’s view is that it’s not a manner of when inflation will come because it’s already here, and that the government is lying about how low it is. That claim, that the government is lying, is why Schiff doesn’t feel the need to make a mea culpa.
Anyway, Schiff was on TV with economist professor Scott Sumner, who writes the Money Illusion blog, and who is the leading proponent of Nominal GDP targeting, which in this current environment would call for more easing.
In a blog post responding to his interaction with Schiff, Sumner provides a neat proof that Schiff is wrong on there being significant inflation now.
Why? Because if there were high inflation right now, then real GDP would have to be currently negative.
And we know that’s not true, because…
1. More than 2 million new jobs a year in recent years, and (contra Schiff) the average work week is stable.
2. Rising industrial production and rising output in all sorts of other sectors like housing and oil and autos and retail and services.
Unless you believe that literally every data point is being faked, then the inflation truthers are just full of it.
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