Recorded at University of San Diego & San Diego Chamber of Commerce ©1978
影片 6:30
consumer is spendthrift , because too much of money, it means the credit loan cannot be taken too much, or it would provoke more inflation again Inflation is a printing press phenomonen, it always caused by a more rapid increase in quantity of money than output
It means our productivity has not been increasing as much as it should
A spendthrift is someone who is extravagant
and recklessly wasteful with money, often to a point where the spending climbs
well beyond his or her means. 大肆揮霍 (財務上)
Quantity of money per unit of output has strong positive relation with consumer price index
影片16:00
before that days, the government discovers that it could escape from the relic of earlier times, the discipline of gold, they discovered a scentific method of controling quantity of money by ending up the linkage to the gold, instead turn to government based money
影片 17:20
We want more spending, but government pay for it, because we don't want more taxes, we want government spend more money on us, but we don't want you put more taxes on us.
這裡講到高通膨的關鍵原因, 美國人民希望政府無上限財政支出, 幫他們創造工作機會, 刺激消費, 但是....... 希望少課徵一點稅在他們身上, 希望政府花更多錢(舉債) 在人民身上
Government spending 450 millon
Taxes only go for 400 millon, and who supposed to pay the other 50 million dollars !? To solve this only by two ways
1. printing more money 印更多錢
2. borrow from public ( Issurance of debts) 政府透過舉債, 變向跟人民借錢
The president proposed tax cut next year, that's pure fiction, nobody proposed tax cut. That so- called tax cuts which is give a small part back to the taxpayer, the taxes paid had gone up.當初尼克森總統採取減稅, 但減稅結果是加在納稅者的實質稅負變得更高
How to measure the inflation, it is the
quantity of money per unit of output , anything that increases the output will
tend to hold down the price, so it is very common for people to say the real
source of inflation is that productivity has not been increasing as much as it
should be, or it’s to say the cure for inflation is to lift up the
productivity.
The government got the revenue by repudiating 抗拒 the inflation
Every year we have debt deficit !! how can it how can that it be going down, Because they are not real deficit, they are deficit financed by inflation
The people who bought the governorment
security in past 10 years they just pay the government the privilege of lending
to it 過去10年買美國公債的人, 只是給予美國政府可向人民借錢的特權
Higher wages is the consequence of the
inflation, not the cause of it
When economy goes bad, there are higher unemployment rate, people say government should print more money for that, in 1929 ~ 1933, one-Third decrease in the quantity of money in United State, which produce the economical catastrophe
The only cure for inflation is that government spending less and printing less. The process of truly curing the inflation is that the bad effect come first, then good effects come later. If a man subject to the craving 染癮 for alcohol which start to go off the the wagon, it’s terrible, he must have difficult times to get rid of this craving. Why if Once he succeeds in doing this then everything will be fine, It goes for the same way it is with inflation. If you succeed in slowing down inflation you will initially have very difficult times, just as inflation stimulated economy temporarily, so slowing down the the inflation then slowing down the economy as well.
The more direct reason to why it’s difficult to stop the inflation Is that There are no clear signs for people who want to stop inflation
要打通膨更困難地方在於一般民眾對於抑制通膨的決心不夠,
( 大家一聽到政府縮減支出, 或升息, 就害怕未來經濟崩盤, 開始反悔)
For the home owner brought the house in the past 30 years has gainer in inflation, he was able to borrow a mortgage which the inflation had paid off along with paying off government debt. The homebuyer is real the beneficiary from the inflation
這段話暗示房地產是高通膨環境, 投資的最佳標的
Inflation is phenomenon of Montreal policy
within the countries
影片45:20
When nation get accustomed to higher and higher
inflation, it needs bigger and big ger doze to have any stimulating effect
Those effect can be minimised by trying to take the cure gradually Instead of overnight. 通膨對經濟的負面影響可以靠一些措施去慢慢消退, 但絕非一日可蹴
Here we are in the nation with a base rate of inflation somewhere around 7%, It will be mistake to bring down to zero next year. We ought to do it over 3 ~ 4 years to give people the chance to adjust. We can also minimize the side effect of inflation. In my opinion by adopting widespread program of Escalator clause, particular with respect to government obligations, particularly with respect to taxes
Escalator clause a clause in a contract that allows for a rise in wages or prices under certain conditions.
所以這裡 Friedman說我們可以在適當條件下提高薪資水準, 去減緩通膨的負面影響
I thinl it is a disgrace and a scandle we
had not had legislation which adjusted the income tax system so that inflation
does not automatically raise rates. Congress will be very quick to index the
salaries of government employee, that it’s reluctant to apply the same
principles to the taxes imposed to citizens 幽默說道政府會很快地幫官員們加薪, 另一方面被問到 : 是否也幫忙一般人民加薪或減稅, 就心不甘情不願地拒絕 ( 全場大笑 ~)
What if we don’t cure inflation, we have no good choices, if we don’t cure inflation, if we continue at high rate of inflation, we also have high unemployment. 高通膨持續幾年以後, 隨之而來是高失業率, 請切記 One of the reason is that the false cures will be attempted, in every country who have great inflation, the government have resorted sooner or later to price and wages controls. Supposedly attempt to cure the inflation. We did that in 1971 this country and get the disastrous results.許多國家在面對通膨情況的解決方式是把價格和工資壓制在某一個限度, 美國在1971年這樣子做, 結果是幾年以後無法想像的災難
Wage and price control are not a cure for inflation. In fact, wages and price controls imposed by government that want to inflate but want to conceal it from populace. Government want to get a sort term of benefit by pumping up the economy, and they want populace to think what they’re doing something with inflation, so they announce the great Fanfare願景 by fixing wages and price controls, but the result is only to hold down and conceal the inflation for 1 or 2 years and then blow up, which it’s exactly what happened after 1971. 政府宣佈它要刺激經濟, 給予人民某種程度的牛肉和希望, 使人民相信政府的確有採取某些措施打擊通膨- 透過價格/薪資上限管制, 通膨經過1~2年是有些許壓制下來, 結果後來又無預期的爆發開來, 這就是1971年以後狀況, 由此可見價格/薪資管制不是對抗通膨的良方
Fanfare 這裡用作政客給予選民一些牛肉, 美好願景
In light of this background, I come to this point. I
think it’s very instructive to look at recent US history. Our inflation really
started in 1950s. we indeed have substantial inflation during the Koera war,
then after that it end, we have an creeping inflation. It was an accident that
inflation didn’t continue and grow from that point on, but we had a political
accident, we had a nonpolitical president who was willing to risk his real
election of vice-president in order to stop the inflation. Mr. Elsen Hoover was
willing to take unpopular measures to stop inflation, that put us back to a
Noninflation course, by approving measures that lead to a series of recession
in 1958 and then in 1960, by holding down government spending, holding down
government money creation. So from the inflation rate at that time which regarded
as terrible of 3%~3.5%, It was brought back to essential zero. Our real
inflation started in early1960s, when John Kennedy inherited this windfall of
non-inflation environment as a result of president Elsenhoover policies,
From 1960 we have been a roller coaster, we have been going up in inflation, and we have coming down, again, we have been going up, then we have been coming down. 當時1970s通膨是呈現螺旋性一年比一年還要高, 它會間歇性回落, 過1~2年突然又猛力拉升 !! Every time we go up there, there’s a great outcry(公眾憤怒) that we have to do something about to stop inflation, and we tend to step on the brakes, the moment the unemployment go up, there is an even bigger outcry, 這時候政府會踩剎車( 升息)對抗通膨, 但造成高失業率, 引起民眾憤怒we have to do something about the employment, so we reverse and step on the accelerator instead of the brakes, 反過來政府對抗高失業, 再擴大財政政策或印更多鈔票 and we’re off again.But this roller coaster is around upward level, it is not an been level, each peak is higher than preceding peak, each trough is higher than preceding trough. 最後結果是 5~ 10年來看, 造成通膨是長期往上升趨勢, 一山比一山高, 這次峰谷比上一次谷底還要高
In 1961 the lowest rate of inflation is 1%. in 1967 the next trough the lowest rate of trough is 2.2%. In 1971 before the Nixon introduced the price controls in order to control what supposed to be the horrendous rate of inflation of 4.5%. In that periosd the lowest rate is 4%. In 1976 when we again went through the recession to stop the inflation, the lowest rate of inflation is 5%, so each bottom have been higher than preceding one, similarly, each top rate have been higher than preceding one, In 1966 we reached 4%, In 1969 we reached 6%, In 1974 we reach 12%. It’s not a pleasant prospect. So we have been on the roller coaster, going up and up. And the problems is that we are accustomed to our addiction and we need a bigger dose to get another high.
If we look at the recent period(指當時1978年), we have the same situation, from Jan 1974 to Jan 1975 the quantity of the money defind as include the currency in your pockets and all deposits in the commercial banks, what has come to a Jargon literature to be known as M2, and M2 had grown in 6.8% in a year. In history we had 4 times again pay the price for stopping the inflation, and gotten no benefits. We stepped on the brakes and we slow down the monetary expansion then we’ve take a recession, we’ve had rising unemployment, and then It’s just the moment inflation starting to the taper off that we suddenly throw the whole ballgame away and go to race again by printing press(money).當通膨已經減緩, 我們突然拋下恐懼, 繼續競相印鈔票 Unfortunately, given this mistakes, at the present time the option open to the country is only bad option that we don’t have good options. If you’re sitting the Federal reserve and making on monetary policy, you must suppose you don’t have anything you could do, whatever you do is bad. Given that amount of money have been pumped into economy, you only have two bad choices. If you slow down drastically in order to try to hold back the inflation, the economy will experienced recession in 1978 or early 79s, it may be a fairly severe recession. Aternatively, you can say that, well we can condemning the economy to go into the another period of double-digit inflation, 2 years ago there was a choice. Having paid the price for slowing down the inflation, we should have continued relatively slow rate of monetary growth, and then we will on our way to cures our inflation. But we have not done so, as I don’ really blame the people who are doing it.
The real blame have to be put on us, the citizens, the voters of this country, for not telling our government what we want them to do. And I am afraid we shall have to go through more several of these swings of roller coaster before the America people decide whether they have had it enough and that’s time to bring it end, 簡而言之, 1978 當時美國人民還沒有從惡性通膨中覺醒, 不見棺材不流淚 It’s time to send an unmistaken message to Washington,” We want you to stop the roller coaster, When we do , there is not technical difficulty to stop it, Let me emphasize it, it will not be costless to continue what we are doing. If I may conclude about my medical analogy, If you’re sick, it’s very very seldom that the Doctor will give you a cure which enable you to rise from your bed the next day the whole person the completely unaffected by illness. 暗示要對抗高通膨不是一朝一夕可以達成, 這次2023也是如此 We have a disease which is called inflation. Fortunately our basic constitution is strong, health, this is a strong country although we are making our best to make it unhealth. We have been doing our best to take measures to reduce our productivity, but nonetheless we are still strong, health country, there is nothing basical wrong with us, but we have suffered from a self-imposed disease of inflation. Sooner or later, I am sure we will get up the will to cure it, but we shall not cure it, or continue it, without paying the price in either way
1. In 19 century, The central banks failed twice to oversee other banks' operation and maintain national currency
2. Because the depreciation of legal tender paper money was thought to violate the contract, some opposed the creation of a bank explicitly they were opposed to issuance of paper money, they fear the paper money will invariably lead to scheme where debtors increase their wealth at the expense of creditors. Indeed the the United States had ample experiences with currency depreciation
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