The Inflation Myth and the Wonderful World of Deflation

What if everything you’ve learned about inflation is wrong? The Inflation Myth and the Wonderful World of Deflation illustrates our rapidly changing world where constant technological innovation leads to cheaper and better products. These changes are no longer reflected in the ways we measure inflation. Renowned investor and author Mark Mobius persuasively argues that what we believe to know about inflation today does not reflect the reality any longer. It is a myth, a legend, a fable, and, yes, a falsehood for a number of reasons. The Inflation Myth and the Wonderful World of Deflation tackles a number of fascinating topics, including: The political nature of inflation measurement where governments manipulate and exploit inflation numbers to fit their economic programs The extreme difficulty involved in gathering accurate data to measure inflation and the resulting inaccuracy of those measures The error of using currencies to measure inflation when those currencies are continually being debased by the governments who issue them Finally, and most importantly, the advances in technology and automation which are leading to continuously falling costs for goods and services Perfect for anyone with even a passing interest in macroeconomic phenomena or government policies, which are significantly impacting people's everyday lives around the world, The Inflation Myth and the Wonderful World of Deflation provides a remarkably compelling and provocative view of stunning originality.

Preface xi Introduction xv Acknowledgments xxiii About the Author xxv 1 History and Inflation 1 History as Inflation Importance of Inflation Numbers The Long Coffin Marco Polo and Money Gold and Silver Coins Money and Trust The Urge to Debase Rome’s Debasement England’s Debasement Shells and Money 2 The Critical Importance of Inflation Numbers 21 Making Important Policy Decisions on Inflation Data International Interest in Inflation The Influential Measure Impact on Individual Lives The Popularity of Inflation Numbers India Stops Futures Trading To Influence Inflation China’s Efforts To Influence The CPI Numbers The Effect of Mexican Tomatoes On Inflation Venezuela Attempts To Rein In Inflation Through A Cryptocurrency Fed Up Inflation Numbers Knock-on Effect Wage indexing When Central Bank Actions Fail To Influence Inflation Investment Decisions and Inflation Numbers Bank Decisions 3 What is Inflation? 37 What the Experts Say Defining Inflation Inflation as a Worldwide Disaster 4 What is Hyperinflation? 53 What the Experts Say Hyperinflations around the World The German Hyperinflation Experience Yugoslavia: Printing Money To Pay Government Debt Legalized Looting In Zimbabwe Printing 30 Tons of Zairean Banknotes 5 Money Supply and Inflation 67 Inflation as a Monetary Phenomenon What Is The Money Supply? Measuring Money Supply Money Creation through Fractional-Reserve Banking The Money Illusion Credit Is Money The Collapse of Paper Money Demise of the Dollar The Gold Standard The Universe of Cryptocurrencies 6 Measuring Inflation 85 Why You Can’t Trust the Inflation Numbers The History of Measuring Inflation Building the Index Gin and Inflation Measurement The Boskin Commission US GDP Numbers Questioned What Are People REALLY Buying? The Changing Time and Place Bias Market-Basket Bias Data Gathering Difficulties Complexity Data Gathering Currency Change Differences Currency Confusion – The Tenge Pakistan Statistics Concerns China’s Suspect Statistics UK Inflation Index Credibility India – Data Gathering Difficulties The Brazil Experience Urban–Rural Inflation Differences In China Inflation Differences Within Turkey Malaysia Concerns South Africans Skeptical Too Income Differences What Statistics Fail to Measure 7 Controlling and Manipulating Inflation 125 Governments’ Vested Interest Central Banks Control Attempts The Phillips Curve The Taylor Rule The Fisher Effect Inflation Targeting The Magic 2% The Low Inflation Trap Argentina: Lies, Damned Lies Brazil Anti-Inflation Efforts Chinese Government Efforts to Control Inflation Philippines Data Control Venezuela – Eliminating a Bill India Control Efforts Korea: Consumer Pressure 8 The Wonderful World of Deflation 155 What the Experts Say: The Trend towards Lower Prices and Rising Incomes Food and Gold Productivity and Deflation Technology and Deflation Deflation is Next Door – Singapore and Malaysia Prices Deflating the World’s Fair Linking Income and Costs Deflation Statistics US Deflation Singapore Deflation Japan Deflation India Deflation China Deflation 9 Conclusions 195 References 199 Index 211