"F. George McDuffee" wrote in message
...
On Thu, 8 Jan 2009 09:00:51 -0500, "Ed Huntress"
wrote:
snip
Think about how this question arose. I said you can't have simultaneous
inflation and deflation. George says you can if you have multiple
currencies. I said we have only one currency. So George brought up
"spondulucks" or whatever and the fact that these securities act like
money.

Hell, sheep act like money, if you barter for them. But that doesn't make
them a currency. They're just an asset you can trade or sell for currency.
snip

At the limit, and under pathological economic conditions
simultaneous inflation and deflation are indeed possible with a
single "money of account" unit, if careful attention is paid to
definitions.

In Econ101 "Money" is defined as a medium of exchange and measure
and store of value.

When hyper inflation occurs, as in 1920s Germany, there is plenty
of "marks" in circulation, but the mark is no longer a medium of
exchange because no one will accept it, and by definition,
because of hyper inflation, cannot be a measure and store of
value. Thus there is no Econ 101 money available, operationally
causing a depression/deflation.

George, we do not have such a situation. We have a functioning currency.
Regardless of what you're saying about Weimar Germany (and I would disagree
with your conclusions, but it's not an issue here), our situation is that we
have one currency, and thus cannot have simultaneous inflation and
deflation.

The only country I can think of that has two official currencies, and in
which goods are priced in both, is Cuba. Other countries have official plus
unofficial currencies (often the US dollar), and they can have screwy
situations, too. Many countries accept two different currencies (Canada used
to; I don't know if they still do), and they're always adjusting up and down
relative to each other. But that does *not* mean they have simultaneous
inflation and deflation. It just means they're pricing goods in another
currency as well as their own, and the exchange rates fluctuate. If they
have inflation in their own currency -- in other words, in their real
economy -- prices in a more stable economy will be deflating in relative
terms.

Neither does the US have simultaneous inflation and deflation; nor could it,
unless we had an additional official currency.

Ok?

--
Ed Huntress