Anti-intervention

Via Samizdata,

Bank steps up pace of quantitative easing:

The Bank of England stepped up its quantitative easing programme on Thursday, saying it would buy 5 billion pounds of gilts next week after investors eagerly offloaded 2 billion pounds worth on Wednesday.

Fake cash gang ‘run as business’:

Five men have been jailed and a sixth given a suspended sentence after admitted running a £5m counterfeit currency operation “like a successful business”.

As one commenter said,

The Government clearly does not like competition, especially from the private sector.

There is no good reason why the government should be allowed to print more money.

Inflation is supposedly neutral in the long run. If the nominal value of everyone’s money doubled overnight, and all prices doubled overnight, then it would make no difference.

However, in the short run, the people who get newly printed money benefit first. It takes a while for that money to filter through the economy. The people who get the newly printed money second benefit a little less. As the money filters through the economy, prices start to rise. The people who get the new money last are the ones who lose out. The price rises have already occurred before they get that money.

It doesn’t matter whether counterfeiters get the money first, or whether it is the government and its allies. Inflation hurts the little man.

So in the short run, inflation is immensely damaging. In the long run, too, inflation is immensely damaging. The amount of money the government creates is unpredictable, leading to unpredictable inflation. The subtle shifting of relative prices is drowned out by the general rise in all prices. People can not use price signals, and therefore cannot plan rationally. Prices are information. Inflation is like the government going around after an earthquake jamming the radios of the people who are trying to help.