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Strategies & Market Trends : Asia Forum

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To: Robert Douglas who wrote (5246)7/22/1998 9:34:00 PM
From: Frodo Baxter   of 9980
 
Hey Bob and others...

So I've been fixating on money supply growth and GDP growth. As you know, and as I've plotted on my silly website, real M3 growth has overtaken real GDP growth. This has been interpreted by the strict monetarists as an inflationary warning.

Others have suggested that this is not inflationary because dollars are supporting foreign economies.

So I was thinking... you think it'd be kosher to subtract the trade deficit from M3 growth? As those greenbacks have been effectively taken out of circulation. Or would that be too screwy, as they are still exchanged for goods. (you know, the too few goods which are being chased)

Or should I just follow gold and commodity prices?
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