Can you quote where Friedman says “inflation [in America] started the year after the Fed was created”?
What you may be trying to say is until about 1900 there was little secular (i.e. fundamental long-term) inflation, given price levels oscillated more than they moved [1]. But the change to steady inflation pre-dates the Fed. And the secular shift to constant inflation starts in WWII, not 1914 or 1976.
The chart I showed did not show "steady inflation" before the Fed. The Depression is a bit of a special case, the deflation there was also caused by the Fed and their misunderstanding of how to adapt to changing conditions.
"The Federal Reserve System therefore began operations with no
effectiye legislative criterion for determining the total stock of money.
The discretionary judgment of a group of men was inevitably substituted
for the quasi-automatic discipline of the gold Standard." pg 193
"The stock of money, which had been rising at a moderaterate through-out 1914, started to rise at an increasing rate in early 1915, rose
most rapidly, as prices did, from late 1915 to mid-1917, and then resumed
its rapid rise before the end of 1918, rather sooner than prices did.
At its peak, in June 1920, the stock of money was roughly double its
September 1915 level and more than double the level of November 1914,
when the Federal Reserve Banks opened for business." pg 198
"The Reserve System was thus in an asymmetrical position. It had the
power to create high-powered money and to put it in the hands of the
public or the banks by rediscounting paper or by purchasing bonds or
other financial assets. It could therefore exert an expansionary influence
on the money stock." pg 213
"The large federal government deficits, totaling in all some $23 billion,
or nearly three-quarters of total expenditures of $32 billion from April
1917 to June 1919, were financed by explicit borrowing and by money
creation.30 The Federal Reserve became to all intents and purposes the
bond-selling window of the Treasury, using its monetary powers almost
exclusively to that end. Although no "greenbacks" were printed, the
same result was achieved by more indirect methods using Federal Re
serve notes and Federal Reserve deposits. At the beginning of U.S.
participation in the war, Federal Reserve notes accounted for 7 per cent
of high-powered money and bank deposits at Federal Reserve Banks for 14
per cent" pg 217
"The Reserve Board was aware that Bank discount rates were below
current market rates throughout 1919, that this was contributing to
monetary expansion, and that monetary expansion was contributing to
the inflation." pg 222
> Friedman quotes attributed inflation to the actions of the Fed
Then this is a lie:
“Inflation started the year after the Fed was created.
See ‘Monetary History of the United States’ by Milton Friedman” [1].
> for inflation through the history of the US, see
I’ve already pointed out how that source lies about the data it cites [2].
I will assume you’re misunderstanding what you’re reading. But it’s too close to willful dishonesty for me to continue to engage if you’re just going to double down.
Sorry, didn’t mean to convey that. Just perhaps mild frustration.
I don’t believe you meant to speak inaccurately. But the chart clearly misquotes its source data. That was pointed out and yet we couldn’t get past it across multiple threads.
I pulled the source data and recompiled the true rates; they partly support your hypothesis (but not the chart’s). There was inflation before the Fed but, if those data are to be believed, very little of it was secular. The balance of inter- versus intragenerational stability (and how that may have changed with industrialization and computers) is a genuinely interesting question, and not one I’d have stumbled across in this context were it not for you.
[1] https://www.investopedia.com/ask/answers/021115/how-long-has...