On top of being a great political philosopher and revolutionary, John Locke paved the way for compassionate libertarian economics, drawing upon property rights, natural moral law, and reason.
Monetary Inflation and Price Inflation
"Recently Fed Chairman Ben Bernanke said he was not worried about price inflation because investors are currently paying a very low premium for inflation-protected Treasury securities, adding, 'The state of inflation expectations greatly influences actual inflation.' Gerald O’Driscoll, well known in free-market circles and a former Fed official, retorted that Bernanke 'has the causation precisely backwards'. In fact the causation runs both ways. Market participants try to figure out what the Fed will do, and the Fed tries to figure out how it can influence expectations, and on it goes, back and forth. But as in the stock market, expectations may turn out to be wrong, and in the long run only the fundamentals matter."
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