Ron,
>>Two major events/issues have clearly contributed to having money supply jacked up to such rates for limited periods
of time, namely the LTCM/Asian Contagion event, and Y2K. But AG has been severely constricting money supply since January and jacking up rates.<<
By some standards money and credit growth has been rapid since about 1995. That coincides with the explosion of the S&P and Nascrap.
It seems to me we have a hugely flawed monetary system.
The Fed sets rates and conrtols the money supply growth primarily based on inflation measurements that are entirely subjective, that do not include asset prices, and without much regard for the available domestic savings level etc....
Futhermore, as many in this thread have pointed out, there are numerous problems with measuring GDP, even without including the areas that are controversial (like hedonics).
IMO money and credit growth must some how be closely related to what's actually going on in the real economy from a lot of perspectives, yet we have close to no clue what that is at present using government or private stats that are inaccurate, subjective, and trailing.
Wayne |
