http://krugman.blogs.nytimes.com/
"Inflation Predictions
Peter Schiff on Glenn Beck, Dec. 28, 2009:
" SCHIFF: You know, look, I know inflation is going to get worse in 2010. Whether it’s going to run out of control or it’s going to take until 2011 or 2012, but I know we’re going to have a major currency crisis coming soon. It’s going to dwarf the financial crisis and it’s going to send consumer prices absolutely ballistic, as well as interest rates and unemployment... I mean, I’m running for the United States Senate, so I can try to change that myself. But if we don’t reverse course, if we continue to stimulate, then we will end up with hyperinflation and it will be like Zimbabwe."
OK, strictly speaking the time hasn’t run out — we could, I guess, see an explosion of inflation next year. But with commodity prices down, wages going nowhere, and the dollar actually strengthening against other currencies, it’s kind of hard to see where that’s supposed to come from.
Look, the Austrian/Ron Paul types made some very strong predictions about inflation — and rightly, given their model of how the world works. In their version of reality, it really isn’t possible to triple the monetary base without dire effects on the price level. In my version of reality, of course, that’s not only possible but what the model predicts in a liquidity trap.
So since we did indeed triple the monetary base with nothing much happening to inflation, the right lesson to draw is that their model is all wrong. Unfortunately, I see no hint that anyone in that camp is prepared to consider that possibility."
I'm not the only one wondering why the inflationistas will not recant. Instead they will open their timeline to forever ("see, it is now 2027 and the inflation I predicted has arrived, Ha!") or, like csl, claim the official numbers are bogus. Forms of denial.
Sorry. Your theory proved incorrect. It's good to concede when you have proved wrong. Unfortunately, this means the theory is wrong and you must rethink it. But there you go. If the facts don't fit the theory, it isn't the facts which must change. It's the theory.
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