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James Mackintosh says get used to inflation. Tell that to the Venezuelans.

Posted by John Reed on

James Mackintosh has a WSJ column today that says “get used to inflation.” I submit that the recent Venezuelan experience wt inflation reveals quite clearly that Mackintosh has no idea what he is talking about.
The average adult there lost 24 pounds from inability to find food. High inflation combined with price controls means empty store shelves. Since 2014, at least 5.6 million Venezuelans—more than 18 percent of the population—have fled the hunger, crime, violence, and collapse of public services that have destroyed that nation.
Getting used to it is NOT an option.
Mackintosh also speaks of Taxpayer Inflation Protection Securities (TIPS) as a legitimate protection against inflation. That is only possible if you display willful ignorance by not reading how the inflation adjustments in TIPS are calculated and when, and you have assumed, disregarding all evidence, that inflation cannot exceed about 15%.
TIPS adjust too slowly to do anything but mock TIPS owners in double-digit inflation. TIPS are a cruel joke on those whose analysis of them stopped at reading the words “Inflation Protection” in the name. The truth-in-advertising version would be Single Digit Inflation Protection.”

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