A discussion about inflation with Marc Lavoie and Mathis Vernengo.

This round table discussion took place on September 16, 2022, at the Fields Institute in Toronto ,part of the Monetary Policy and Income/Wealth Distribution workshop, hosted by the Review of Political Economy and the Monetary Policy Institute. The workshop was funded by the Social Sciences and Humanities Research Council, (SSHRC) the Association for Social Economics, and the Fields Institute.

[@herbwiseman9084]

Inflation is the imposition of liabilities -prices - on us by those with the power to impose prices. The purpose is to extract or transfer more assets for the benefit of those with the power to set prices. Mythical supply and demand curves do not actually apply but demand-pull explanations are preferred to cost-push ones as the cover story. When central banks raise interest rates to allegedly fight inflation they signal the financial markets to impose more liabilities in order to transfer more assets to those financial operatives. Purely and simply, inflation is price gouging by those with the power to do so when there are or may be some shortages in supplies. They may not be real but expectations of shortages also justifies raising prices and imposing liabilities just in case shortages occur. Demand usually remains the same but the pretense is that it must be suppressed. That covers the real issue which is the facilitation of more transfers of assets to those with power to set prices. In conclusion, inflation is yet another cover story for asset transfers to the wealthy as is raising interest rates to fight inflation. By focusing on price increases or liabilities, emotions are aroused stirring up more animal spirits to justify austerity measures. The outcome of more liabilities and more asset transfers is more wealth and income inequality.

[@herbwiseman9084]

To understand these phenomena it is useful to look at these things from a balance sheet perspective and power dynamics. The formulae are a waste of time and this presentation makes it all more complicated than necessary. Causes of inflation are from the ability of those able to set/increase prices as described in the graph of the blue lines and thus their power to extract more assets from society. Most of what is described in the first 12 minutes or so is a cover story. Assets minus liabilities equal equity. If my liabilities are higher and my assets do not change, my equity declines. This presentation and most analyses assume that a decline of supply or an increase in demand combine to cause inflation. That is profiteering. Very few people experienced an increase in assets they received from their employment but inflation and higher interest rates force more of those assets they do have to be transferred to the price setters. It is a myth to describe it in terms of of supply and demand. Economists love to do that but it is nonsense.

[@davidwilkie9551]

Professor Richard Werner designed Quantitative Easing as a result of an experiment following money creation,and recived criticism for the idea in spite of the achievement of maintaining flow/velocity that helps economies continue to operate and not size up.(?) The other thing a Central Bank might do is Monetary Tightening and raise interest rates, which is far from being a constructive reversal of QE. Professor Werner's suggestion for breaking up the misused bank power, to have multiple smaller Lenders may not solve the inherent problem of value in the Medium of Exchange being forever volatile, but it is simply more manageable and observable by Moderators and Regulators.. MMT Provisioning concept is similar, (design of balancing strategies from watching the behavioral policy results), and operates, when the orientation-observation resonance of perceived value is in tune with the functional value of money. Critics say what they say because the market forces are inherently volatile and forever unpredictable, a fact about which, no one is happy. (?)

[@stavroskarageorgis4804]

The answers to Grasseli's question were simply *terrible*.