INFLATION and KEYNES LAWs

INFLATION and KEYNES LAWs

Hugo Adan . March 25, 2020

Brief reaction on ‘Inflation” that is about to became huge problem  soon

In short:  IF INFLATION goes above 2 points  the system dies, the Govt collapse:

Reaction to:

SENATE RELEASES FULL TEXT OF $2 TRILLION STIMULUS BILL: HERE'S WHAT'S IN IT

...all 883 pages of it!

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No tienes que leer todo este mamotreto , solo elige lo que vez relevante.

You don't have to read all this volume, select what see is important

Where this money goes? to the rich, you know it. 

The problem below are the empty stores and high  prices for basic products.

Adonde va ese dinero?  Ariiba..ya lo sabes. El problema abajo son los mercados vacíos y los precios altos para mercancías de urgente necesidad.

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DOES FINANCIALIZATION WITH QES +BAILOUTS SOLVE THE PROBLEM?

Of course NO, it only postpone the collapse.

INFLATION  (precios altos) is needed  in Keynes system, but above 2.5 it became a boomerang if wages are been keeping  stationary. It kills the labor DEMAND and break the ‘Deflationary’  balance, in his language.

P Krugman said, if the labor can’t buy: the demand falls and not  only it creates labor rebellion, it also discourages borrowing and  spending and encourages sitting on cash.

Is what happens now: the rich sleep on cash while the labor can’t sleep with real ‘falling  salaries’.  So, T .. put salaries up.

To Keynes  the deflationary balance is broken when prices are up and it is worse if the inflation came below 2, it breaks the supply  factor and the Keynesian law on supply-demand  became worse.

Don’t forget that we are still using the Keynesian Economics. So, we’ve the keep  & respect Keynesian laws. And remember what Keynes said: 

“The right remedy for the market & trade cycle is not to be found in abolishing booms and thus keeping us permanently in a semi-slump,  but in abolishing slumps  and thus keeping us permanently in a quasi-boom” .

THIS IS WHAT TRUMP IS ‘QUASI’ IMPLEMENTING NOW, BUT without salaries- up ..

SO :

There won’t be boom nor quasi-boom if the demand from the labor is being killed.  

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