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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: ild who wrote (259949)9/11/2003 11:33:31 AM
From: Tommaso  Read Replies (1) of 436258
 
The money is still there. The assets denominated in money (some of them) have dropped in value and that seeming value has gone to "money heaven." But the dollars created by the Fed are there, in bank accounts and in cash, all around the world. Once created, money does not go away until and unless it loses all value, as Confederate money did when the South lost that war.

The lag between excessive money creation and rises in the PPI and the CPI varies, but typically within 2-3 years "too much money starts chasing too few goods" and prices rise.

I think Jim Rogers (and Marx, and Keynes, and even Hemingway, all of whom Rogers refers to) are correct: the US govnerment has debased the currency and this will show up in rising commodity prices (and wages for those who are in positions to demand them).

I don't expect anything approaching runaway inflation, but do expect commodity prices on average to move above 6% per year increase.

There's already been 100% inflation in gasoline prices from two or three years ago.
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