The Danger of Deflation (Phobia) | Dr. Joseph T. Salerno
Summary
Deflation Phobia: Dr. Joseph T. Salerno argues that the fear of deflation, termed "deflation phobia," is misguided and leads to harmful monetary policies like inflation targeting.
Natural Deflation: Salerno explains that natural deflation, driven by technological advancements and increased capital investment, results in falling prices and increased buying power, benefiting the economy as a whole.
Historical Evidence: The 19th-century U.S. economy serves as an example where deflation coincided with significant economic growth, increased incomes, and higher standards of living.
Modern Examples: Industries such as computers, televisions, and mobile phones have experienced significant price reductions while expanding output and improving quality, showcasing the benefits of deflation.
Misconceptions About Inflation: Mainstream economists' reliance on the concept of a "price level" is criticized as misleading, with Salerno advocating for a more nuanced understanding of inflation's impact on individual prices.
Inflation Targeting Risks: The push for higher inflation targets, such as 4% annually, is seen as detrimental, eroding the dollar's value and reducing purchasing power over time.
Conclusion: Salerno concludes that natural deflation is essential for a dynamic capitalist economy, rewarding productivity with real income growth, while fear of deflation leads to policies that diminish the dollar's value.
Transcript
Well, first of all, I I'd really like to thank my longtime friends, Dr. Murray uh Sabin and his beautiful wife, Flo Florence Sabin for their generosity in sponsoring this lecture. Um, so I want to start off by a confession by making a a confession and that is I love falling prices. I love deflation. I want all prices to go down to a nickel. I stole that line from Murray Rothbart. I've heard him say that in a talk. It's it's not inflation that we should fear. It's the opposite, deflation phobia. Um which is actually um the fear of falling prices. Um we should fear deflation phobia and I'll I'll argue this very uh as we as I go on in the lecture. Um we should fear it because it leads to a very dangerous institutional um monetary policy uh and that is inflation targeting. So let me just begin with um some facts about deflation. In today's world, deflation is a word that means a general fall in prices. And I'll I'll use it in that sense even though that's not really not a expedient way of of using the term deflation. It really should be a decrease in the money supply. Falling prices are a natural outcome of a capitalist economy using a market-based commodity for money like gold. Deflation phobia refers to a mental disorder in which many people, mainly economists, um, fear deflation because they think it is harmful to the economy. Natural or what I've called growth deflation is caused by improvements in technology and increased capital investment that introduces new products on the market and lowers the cost of existing products. The result is an increase in the supplies of both new and existing goods in the economy. Because the money supply under the gold standard grows very slowly, the rapidly increasing supplies of goods drives prices progressively downward. Um, natural deflation when prices are falling spreads because of of an increasing supply of goods spreads the benefits of economic growth throughout the economy because falling prices increase the buying power of all wages, rents, interest returns, and retirement payments, even if their nominal amounts do not change. Monetary inflation on the other hand prevents the natural fall in prices and diverts most of the additional goods to those who receive the new money before most prices have risen. Um these include federal bureaucrats, government contractors, big financial institutions, recipients of corporate and individual welfare. Um all of these groups receive most of the loot, most of the new goods that are being produced in a progressive capitalist economy. Um, meanwhile, little is left over for the productive workers and entrepreneurs who don't receive the new money right away. Deflation therefore goes handinhand with economic growth and rising incomes and standards of living across the board. This is illustrated by the experience of the United States in the 19th century. Um, you'll note that from 1819 to 1860, prices fell were cut in half. they fell by 53%. And after 1970 through 19 1898 1870 through 1898 prices fell by again almost another a half again. Um and and this was when the US had its greatest during this period the US had its greatest decade decadel long um period of growth of of of of nearly 4% that was the 1880s and and the US was uh transformed from an agricultural to an industrial economy. Um so you can see here prices and and income and consumption all increased during this period. Wholesale prices dropped by 34%. Uh every year they're falling by nearly 2%. Consumer prices on an average consumer prices fell 47% um almost 2.5% annually. Real gross national product the total income the total output of the economy rose 4.5% each year. and cons and some of those were capital goods, the rest were consumer goods. So consumption per capita rose 2.3% a year. But it's really not only during the 19th century that inflation was beneficial. Deflation was not only beneficial then um but the deflationary processes have also greatly benefited households and businesses under the current fiat dollar standard in recent decades. even though their natural operation has been partially and deliberately stifled by the Fed's inflationary monetary policy. Let me take three examples. Computers, televisions, mobile phones. Okay. Okay. That's an IBM mainframe computer 196061. Cost $2.9 million. It weigh 10.4 tons. Okay. That's it took a whole room to hold it. Okay. Today, a laptop sells for one $500 to $1,000 and is 30,000 to trillions of times faster depending on the task than and with more memory than the IBM mainframe that you just viewed. Um, from 1980 to 1999, personal computer prices fell by 90% and yet the ex the industry exploded in growth. Um, in 1980 there were only three 3/4 of a million PCs shipped. In n by 1999 there were 113 million units shipped and and and in 2024 407 million shipped. So prices fell, profits rose, new firms entered, and output expanded tremendously increasing the buying power of all of our dollars in terms of computers. Um price per megabyte of computer memory was 100 was $411 million in 1957 quickly fell to by 1960 to 5.2 million to by 2014 it was 1 cent per megabyte and today it's 210 of a cent. Okay, this is great. This is wonderful. I wasn't kidding when I said I want all prices to fall to a nickel, maybe even lower. Here's uh let's get the televisions. If you'll note, this is from uh 1950. There's been a steady deflation. The red lines indicate that's below zero. Um in every year from 2000 to 2021, I think that's the last year there. Um prices fell by more than 20 between 10 and 25%. Every year the prices of televisions fell. According to the Bureau of Labor Statistics, prices for televisions are 99.3 38% lower in 2025 than in 1950. Um an average inflation rate of negative 6.56% per year. Televisions that cost $1,000 in the year 1950 would cost $6.19 in 2025 for an equivalent purchase if if you could find one. Um, from 2001 to 2019 prices TV prices fell between 10 and 25% as I said every every single year. Yet the television industry grew tremendously in 2002. So during that that that um those 20 years uh in 2002 estimated global shipments of 150 million sets averaging 27 in okay that's how large industry was but it grew tremendously despite the falling prices or because of the falling prices and costs as people purchased more and better quality TVs. So in 2021, estimated global shipments were 221 million sets averaging 50 in twice as big. So there was a vast improvement in quality as well as a vast decline in prices. And that's average size of a TV beginning in 1997. The average size of a television that was sold was 22 in diagonally and um now is uh 2022 stood at 50. now is the 65 inches are just proliferating. Mobile phone prices. The brick with the first mobile phone produced by Motorola was $3,995. Prices quickly came down to in 1996 or a thousand. Um the smartphones were introduced in 2010 or a little maybe before that but um they in 2010 a smartphone was $599 but only 16 gigabytes. Um today the Apple 17 which I just purchased right before I came. They talked me into upgrading even though I had the 16. I when my wife isn't there I upgrade. I I I don't I don't know why that happens, but um and it's now 256 GB. Okay. So, let's look at how great deflation is. Remember now overall inflation from two between 2000 2021 was 65.5%. So, the price level rose by more than 50% rose by 65%. Um and and many um industries took play part in in this rise. Child care about 112%, medical care services 123%, hospital services 211%. And yet the natural deflationary forces of a progressive dynamic capitalist economy were still at work and still increasing our buying power in terms of certain goods. Um, cell phone services fell by 40%, computer software by 72%. TVs by 97% during that period. Toys by 73%. So, you can look at those blue lines. They're all below zero. They're all falling. Okay. The red lines indicate inflation. And that black line in the middle represents, and I don't have a pointer here, I don't think, but that represents zero. Okay. So you can see the uh that deflation is still working. The capitalist economy um is an engine that produces lower prices and in doing so as we'll see um increases um real incomes at least to the extent that it's not uh overwhelmed by inflationary monetary policy. Why then do economists fear falling prices? Oh, I got a lot of time. Good. Um, their analysis of inflation and deflation is based on a false concept and that concept is the so-called price level. There is no such thing as a price level. There are only individual quantities of money and goods exchanged by two specific parties at specific moments of time. As Mises wrote, and I'm quoting, "A market price is a real historical phenomenon, the quantitative ratio at which at a definite place and at a definite date, two individuals exchanged definite quantities of two definite goods," unquote. That's Mises. Each market exchange, this is me. Um, each market exchange in prices is is a historical event just like a war, a political election, or a football game. An economist cannot abstract from the unique features of millions of individual market exchanges and prices and then lump all prices together and average them into a single price level. Similar I mean we think an historian um who tried to talk about an average war or an average election we'd think he was nuts. Well, the same thing is true of the economist talking about a price level, which is an average of all of those different prices. Mainstream economists base the idea of a price level on a false and misleading analogy. To them inflation is like the level of water rising instantaneously and proportionally in a glass as more water is poured in representing money and every eventually settling at a higher and even level. Okay. So to the mainstream economists this is inflation. The water being poured in is Fed monetary policy pouring money into the economy. The level of the water um it stirred up a little bit. It's a little bit wavy as the water is being poured in. But eventually when the inflation stops or pauses, you you reach a new level. Okay? And it that's the and then they measure the difference between the original level and that level and they call it um inflation. Austrian economists and one in particular who's sort of forgotten Arthur Marget who's sort of a quasi Austrian economist who wrote in the 30s and 40s um proposed a much richer and more accurate analogy. Inflation is like a swarm of bees that rises higher and higher while the unique and individual bees are rising at different times and changing positions relative to one another. Now this is really a cool slide. So when new money's injected into the economy, it affects individual prices step by step over time. Some prices rise more than others and others actually may fall. Prices change relative to one another like individual bees in a swarm moving up and down together. And now I don't know if I how know how to play this. That's inflation to the Austrian economist. That's inflation. Notice the bees are changing position. The prices are being revolutionized for those who missed it. Here we go. There we go. That's that's inflation. That's why some people benefit and other people are hurt. Some people's prices don't rise as much or don't rise immediately. Okay? Like those bees. Um they rise only later in the process because the money isn't spent on the goods and services that they sell. So the false analogy between actual prices and an abstract price level leads to the dangers of deflation phobia. It is the fallacy of the price levels that leads economists to fear deflation and promote inflation targeting. For if all prices and wages rise evenly and proportionally to the increase in the money supply, then inflation is harmless. If all prices, if your prices, if your wages go up and your incomes go up as fast as prices go up, you haven't lost anything. The only people who may hurt may be hurt in this process are those who charged an interest rate on their loans that didn't anticipate the increase in inflation. Deflation, in contrast, according to these economists, turn out to be harmful and possibly devastating to the economy because once prices and especially wage rates have reached a certain level, they become stuck or even frozen. So instead of prices and wages falling, employment and production decline and a recession or depression occur. It is that it is as if the water in the glass that you just saw freezes like ice at its current level and any attempt to lower the level only cracks or shatters the glass which is the analogy for depression or recession. So deflation phobia is really a mental derangement of economists who are misled by a false analogy and cannot comprehend the true nature and function of a natural deflation in a progressive capitalist economy. The real and present danger to the e our economy today is the same economist support of inflation targeting which is deliberate policy of expanding the money supply and reducing the value of the dollar in order to avoid deflation at all costs. So the as Mises pointed out many years ago monetary policy is simply a code word for inflation. It's aimed at reducing the buying power of your dollar from what it would have been in a a capitalist economy. And deflation phobia seems to be progressing a progressive disease as some prominent economists are now calling for an increase of the inflation rate from 2% to 4% per year. So I I did a a short calculation. If if it were 4% per year, um over 10 years, prices would be 50% higher and the dollar would only buy 67 cents worth of goods compared to what it would buy today. Um in 20 years, prices would be 119% higher. They would more than double and the dollar would only buy 45% worth of the goods compared to today. So, um let me just end with um a Wall Street Journal article. Uh last year the Wall Street Journal published an article that titled uh an article titled Americans really really hate deflation. That's a big problem for the Fed. I think so. Um the article goes on to cite some prominent economists who support a higher inflation target but despair of the Fed ever implementing it because the American public would hate it. Okay, so that that's what the article says. Now, it it quotes some of the economists that wistfully talk about, oh, it'd be so great if we could raise the in inflation target to 4% or 5%. Then the Fed would have more room to lower the interest rate when we have a recession or depression. Anyway, one economist, John Steinson, an economist who used to who used to support a higher inflation target and has grudgingly backed off, he conceded, quote, I think we should be humble. It may well be that people really shouldn't hate inflation as much as they do for the same reason or for some reason that is good and valid. It is very plausible that we as a field meaning economics haven't really had a lot of success in modeling and articulating these costs. You think mises modeled and articulated these costs many many years ago and showing that inflation affects the economy step by step. Prices change relative to one another. Some people are benefited, the people who receive the new money early, other people are hurt. Um, so to conclude, natural deflation is the hallmark of a dynamic and progressive capitalist economy, producing an everinccreasing range of goods in everinccreasing quantities. It rewards those who participate in their production with greater real incomes and higher standards of living as we see with mobile phones and TVs and so on. Um, fear of deflation leads to monetary policy, which as I saw, as I said, uh, is is simply a code word for deliberately rising raising prices and lowering the purchasing power of our dollar. Thank you. [Applause]
The Danger of Deflation (Phobia) | Dr. Joseph T. Salerno
Summary
Transcript
Well, first of all, I I'd really like to thank my longtime friends, Dr. Murray uh Sabin and his beautiful wife, Flo Florence Sabin for their generosity in sponsoring this lecture. Um, so I want to start off by a confession by making a a confession and that is I love falling prices. I love deflation. I want all prices to go down to a nickel. I stole that line from Murray Rothbart. I've heard him say that in a talk. It's it's not inflation that we should fear. It's the opposite, deflation phobia. Um which is actually um the fear of falling prices. Um we should fear deflation phobia and I'll I'll argue this very uh as we as I go on in the lecture. Um we should fear it because it leads to a very dangerous institutional um monetary policy uh and that is inflation targeting. So let me just begin with um some facts about deflation. In today's world, deflation is a word that means a general fall in prices. And I'll I'll use it in that sense even though that's not really not a expedient way of of using the term deflation. It really should be a decrease in the money supply. Falling prices are a natural outcome of a capitalist economy using a market-based commodity for money like gold. Deflation phobia refers to a mental disorder in which many people, mainly economists, um, fear deflation because they think it is harmful to the economy. Natural or what I've called growth deflation is caused by improvements in technology and increased capital investment that introduces new products on the market and lowers the cost of existing products. The result is an increase in the supplies of both new and existing goods in the economy. Because the money supply under the gold standard grows very slowly, the rapidly increasing supplies of goods drives prices progressively downward. Um, natural deflation when prices are falling spreads because of of an increasing supply of goods spreads the benefits of economic growth throughout the economy because falling prices increase the buying power of all wages, rents, interest returns, and retirement payments, even if their nominal amounts do not change. Monetary inflation on the other hand prevents the natural fall in prices and diverts most of the additional goods to those who receive the new money before most prices have risen. Um these include federal bureaucrats, government contractors, big financial institutions, recipients of corporate and individual welfare. Um all of these groups receive most of the loot, most of the new goods that are being produced in a progressive capitalist economy. Um, meanwhile, little is left over for the productive workers and entrepreneurs who don't receive the new money right away. Deflation therefore goes handinhand with economic growth and rising incomes and standards of living across the board. This is illustrated by the experience of the United States in the 19th century. Um, you'll note that from 1819 to 1860, prices fell were cut in half. they fell by 53%. And after 1970 through 19 1898 1870 through 1898 prices fell by again almost another a half again. Um and and this was when the US had its greatest during this period the US had its greatest decade decadel long um period of growth of of of of nearly 4% that was the 1880s and and the US was uh transformed from an agricultural to an industrial economy. Um so you can see here prices and and income and consumption all increased during this period. Wholesale prices dropped by 34%. Uh every year they're falling by nearly 2%. Consumer prices on an average consumer prices fell 47% um almost 2.5% annually. Real gross national product the total income the total output of the economy rose 4.5% each year. and cons and some of those were capital goods, the rest were consumer goods. So consumption per capita rose 2.3% a year. But it's really not only during the 19th century that inflation was beneficial. Deflation was not only beneficial then um but the deflationary processes have also greatly benefited households and businesses under the current fiat dollar standard in recent decades. even though their natural operation has been partially and deliberately stifled by the Fed's inflationary monetary policy. Let me take three examples. Computers, televisions, mobile phones. Okay. Okay. That's an IBM mainframe computer 196061. Cost $2.9 million. It weigh 10.4 tons. Okay. That's it took a whole room to hold it. Okay. Today, a laptop sells for one $500 to $1,000 and is 30,000 to trillions of times faster depending on the task than and with more memory than the IBM mainframe that you just viewed. Um, from 1980 to 1999, personal computer prices fell by 90% and yet the ex the industry exploded in growth. Um, in 1980 there were only three 3/4 of a million PCs shipped. In n by 1999 there were 113 million units shipped and and and in 2024 407 million shipped. So prices fell, profits rose, new firms entered, and output expanded tremendously increasing the buying power of all of our dollars in terms of computers. Um price per megabyte of computer memory was 100 was $411 million in 1957 quickly fell to by 1960 to 5.2 million to by 2014 it was 1 cent per megabyte and today it's 210 of a cent. Okay, this is great. This is wonderful. I wasn't kidding when I said I want all prices to fall to a nickel, maybe even lower. Here's uh let's get the televisions. If you'll note, this is from uh 1950. There's been a steady deflation. The red lines indicate that's below zero. Um in every year from 2000 to 2021, I think that's the last year there. Um prices fell by more than 20 between 10 and 25%. Every year the prices of televisions fell. According to the Bureau of Labor Statistics, prices for televisions are 99.3 38% lower in 2025 than in 1950. Um an average inflation rate of negative 6.56% per year. Televisions that cost $1,000 in the year 1950 would cost $6.19 in 2025 for an equivalent purchase if if you could find one. Um, from 2001 to 2019 prices TV prices fell between 10 and 25% as I said every every single year. Yet the television industry grew tremendously in 2002. So during that that that um those 20 years uh in 2002 estimated global shipments of 150 million sets averaging 27 in okay that's how large industry was but it grew tremendously despite the falling prices or because of the falling prices and costs as people purchased more and better quality TVs. So in 2021, estimated global shipments were 221 million sets averaging 50 in twice as big. So there was a vast improvement in quality as well as a vast decline in prices. And that's average size of a TV beginning in 1997. The average size of a television that was sold was 22 in diagonally and um now is uh 2022 stood at 50. now is the 65 inches are just proliferating. Mobile phone prices. The brick with the first mobile phone produced by Motorola was $3,995. Prices quickly came down to in 1996 or a thousand. Um the smartphones were introduced in 2010 or a little maybe before that but um they in 2010 a smartphone was $599 but only 16 gigabytes. Um today the Apple 17 which I just purchased right before I came. They talked me into upgrading even though I had the 16. I when my wife isn't there I upgrade. I I I don't I don't know why that happens, but um and it's now 256 GB. Okay. So, let's look at how great deflation is. Remember now overall inflation from two between 2000 2021 was 65.5%. So, the price level rose by more than 50% rose by 65%. Um and and many um industries took play part in in this rise. Child care about 112%, medical care services 123%, hospital services 211%. And yet the natural deflationary forces of a progressive dynamic capitalist economy were still at work and still increasing our buying power in terms of certain goods. Um, cell phone services fell by 40%, computer software by 72%. TVs by 97% during that period. Toys by 73%. So, you can look at those blue lines. They're all below zero. They're all falling. Okay. The red lines indicate inflation. And that black line in the middle represents, and I don't have a pointer here, I don't think, but that represents zero. Okay. So you can see the uh that deflation is still working. The capitalist economy um is an engine that produces lower prices and in doing so as we'll see um increases um real incomes at least to the extent that it's not uh overwhelmed by inflationary monetary policy. Why then do economists fear falling prices? Oh, I got a lot of time. Good. Um, their analysis of inflation and deflation is based on a false concept and that concept is the so-called price level. There is no such thing as a price level. There are only individual quantities of money and goods exchanged by two specific parties at specific moments of time. As Mises wrote, and I'm quoting, "A market price is a real historical phenomenon, the quantitative ratio at which at a definite place and at a definite date, two individuals exchanged definite quantities of two definite goods," unquote. That's Mises. Each market exchange, this is me. Um, each market exchange in prices is is a historical event just like a war, a political election, or a football game. An economist cannot abstract from the unique features of millions of individual market exchanges and prices and then lump all prices together and average them into a single price level. Similar I mean we think an historian um who tried to talk about an average war or an average election we'd think he was nuts. Well, the same thing is true of the economist talking about a price level, which is an average of all of those different prices. Mainstream economists base the idea of a price level on a false and misleading analogy. To them inflation is like the level of water rising instantaneously and proportionally in a glass as more water is poured in representing money and every eventually settling at a higher and even level. Okay. So to the mainstream economists this is inflation. The water being poured in is Fed monetary policy pouring money into the economy. The level of the water um it stirred up a little bit. It's a little bit wavy as the water is being poured in. But eventually when the inflation stops or pauses, you you reach a new level. Okay? And it that's the and then they measure the difference between the original level and that level and they call it um inflation. Austrian economists and one in particular who's sort of forgotten Arthur Marget who's sort of a quasi Austrian economist who wrote in the 30s and 40s um proposed a much richer and more accurate analogy. Inflation is like a swarm of bees that rises higher and higher while the unique and individual bees are rising at different times and changing positions relative to one another. Now this is really a cool slide. So when new money's injected into the economy, it affects individual prices step by step over time. Some prices rise more than others and others actually may fall. Prices change relative to one another like individual bees in a swarm moving up and down together. And now I don't know if I how know how to play this. That's inflation to the Austrian economist. That's inflation. Notice the bees are changing position. The prices are being revolutionized for those who missed it. Here we go. There we go. That's that's inflation. That's why some people benefit and other people are hurt. Some people's prices don't rise as much or don't rise immediately. Okay? Like those bees. Um they rise only later in the process because the money isn't spent on the goods and services that they sell. So the false analogy between actual prices and an abstract price level leads to the dangers of deflation phobia. It is the fallacy of the price levels that leads economists to fear deflation and promote inflation targeting. For if all prices and wages rise evenly and proportionally to the increase in the money supply, then inflation is harmless. If all prices, if your prices, if your wages go up and your incomes go up as fast as prices go up, you haven't lost anything. The only people who may hurt may be hurt in this process are those who charged an interest rate on their loans that didn't anticipate the increase in inflation. Deflation, in contrast, according to these economists, turn out to be harmful and possibly devastating to the economy because once prices and especially wage rates have reached a certain level, they become stuck or even frozen. So instead of prices and wages falling, employment and production decline and a recession or depression occur. It is that it is as if the water in the glass that you just saw freezes like ice at its current level and any attempt to lower the level only cracks or shatters the glass which is the analogy for depression or recession. So deflation phobia is really a mental derangement of economists who are misled by a false analogy and cannot comprehend the true nature and function of a natural deflation in a progressive capitalist economy. The real and present danger to the e our economy today is the same economist support of inflation targeting which is deliberate policy of expanding the money supply and reducing the value of the dollar in order to avoid deflation at all costs. So the as Mises pointed out many years ago monetary policy is simply a code word for inflation. It's aimed at reducing the buying power of your dollar from what it would have been in a a capitalist economy. And deflation phobia seems to be progressing a progressive disease as some prominent economists are now calling for an increase of the inflation rate from 2% to 4% per year. So I I did a a short calculation. If if it were 4% per year, um over 10 years, prices would be 50% higher and the dollar would only buy 67 cents worth of goods compared to what it would buy today. Um in 20 years, prices would be 119% higher. They would more than double and the dollar would only buy 45% worth of the goods compared to today. So, um let me just end with um a Wall Street Journal article. Uh last year the Wall Street Journal published an article that titled uh an article titled Americans really really hate deflation. That's a big problem for the Fed. I think so. Um the article goes on to cite some prominent economists who support a higher inflation target but despair of the Fed ever implementing it because the American public would hate it. Okay, so that that's what the article says. Now, it it quotes some of the economists that wistfully talk about, oh, it'd be so great if we could raise the in inflation target to 4% or 5%. Then the Fed would have more room to lower the interest rate when we have a recession or depression. Anyway, one economist, John Steinson, an economist who used to who used to support a higher inflation target and has grudgingly backed off, he conceded, quote, I think we should be humble. It may well be that people really shouldn't hate inflation as much as they do for the same reason or for some reason that is good and valid. It is very plausible that we as a field meaning economics haven't really had a lot of success in modeling and articulating these costs. You think mises modeled and articulated these costs many many years ago and showing that inflation affects the economy step by step. Prices change relative to one another. Some people are benefited, the people who receive the new money early, other people are hurt. Um, so to conclude, natural deflation is the hallmark of a dynamic and progressive capitalist economy, producing an everinccreasing range of goods in everinccreasing quantities. It rewards those who participate in their production with greater real incomes and higher standards of living as we see with mobile phones and TVs and so on. Um, fear of deflation leads to monetary policy, which as I saw, as I said, uh, is is simply a code word for deliberately rising raising prices and lowering the purchasing power of our dollar. Thank you. [Applause]