What if ours were a crisis of currency and quality?

From Iceland to AIG, innovators seem to have figured out how to print money ...

Gordon's Notes: The Icelandic antidote to optimism

...Financial operators around the world seemed to have discovered a way to effectively print money, a role usually reserved for central banks and counterfeiters....

I think a mass counterfeiting operation is supposed to cause huge inflation, since there's more money chasing the same goods.

But we haven't seen that inflation.

But what if, for some reason, one couldn't raise prices? Then one would have to sell fewer goods for the same money, but make it appear they were the same goods.

That would be occult inflation, such as the occult inflation of diminishing quality. Occult inflation as seen in ...

...the pencil sharpener test for economic recovery ...

So then our crisis is not a new thing, it is a very old thing. It's the crisis that first came when smart people figured out how to adulterate silver coins ...

Update 3/5/2009: As of Mar 5, 2009 there are 7 posts hits when I search on "occult inflation" and "quality" but 2,970 when I search on "hidden inflation" and "quality" including this 1994 comment by Batara Simatupang on the Polish Economic Crisis (click to read bitmap text) ...

In an economy with rigid price controls, inflationary pressures convert to fraud and diminished quality. So in a globalized economy where prices cannot be increased ...

Perhaps some intrepid journalist might want to track down Mr. Simatupang, and ask his comments on the global economic crisis of 2008 ...

(Yes, I love the web.)

Update 3/14/09: This 2007 post is related. Lots of threads. I'd like to stick a word in here about the last few years of fraud in science and research too. It's never one thing...