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In this unflattering episode of Fed Watch, Christian and I dive deeper into the tech-driven deflation debate we started last week with our guest Jeff Booth.
We grew up the “chicken or egg?” a conversation that was not fully resolved last time: Is the deflation of technology first or is the inflation environment first? In other words, what force is primary? We discuss that topic again, and also touch on the problem presented by the fact that not all technologies are equally inflationary.
Modern finance preceded the widely accepted industrial revolution that technological progress and economic stimulus were directly correlated. I tried to claim that it is the culture and capital structure that comes from debt-based fiat money that is driving huge technological progress. Without debt-based fiat money, the deflationary pressures of innovation will return to the natural and gradual pace we saw throughout the days of the classic gold standard.