The real problem with inflation, properly understood is that it is essentially a wealth transfer away from the most productive parts of the economy. This causes bubbles and economic fragility.
Prices determined in the marketplace are absolutely essential to a functioning economic system. This is no less true if today's property was redistributed unjustly in the past. Market prices today are the path to recovery.
Although the money supply has greatly increased, accompanying growth in production has made it possible to keep the current system of immense debt increase going for a long time.
Efforts by US policymakers to boost crude prices and to throw a lifeline to high-cost US crude producers is the exact opposite of what prices are telling us the market needs at this time.
What needs to be done in such a crisis is not to attempt to steer the market to ensure it provides what is needed, but to let it free to do what it always does: match the goals of entrepreneurial producers with the needs of the populace.
Government statistics on worker productivity combine many errors of aggregation such as "average prices" and the total purchasing power of money. So it's unlikely that productivity numbers tell us much that's useful.
Shortcomings in the government's handling of monetary matters, of credit expansion, and the disastrous consequences of lowering the rate of interest gave birth to the ideas which finally generated the slogan "stabilization."
Values of goods are not static things that can be used for central planning. Values apply only to a particular transaction at a particular place and at a given time by human beings.
