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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (5681)1/22/2004 1:13:23 AM
From: Little Joe  Read Replies (1) of 110194
 
The problem with Prechter's argument is that he assumes that the only way to expand the money supply is for the public to borrow money. However, we have had two instances of "tax refunds" recently which in reality just the government giving money to people. The fed can monetize the debt and congress can provide monetary infusions until it causes so much inflation that deflation is preferable a la pre WWII Germany.

Prechter says there is no inflation. I say the government is cooking the books. Just go out and buy a new car, do some grocery shopping, look at the price of commodities, the cost of going to movies and to sporting events. What the economy lacks is pricing power which is due in large part to the cheap chinese (and other low priced competitors) prices.

I am not sure what is causing M3 to drop but I suspect it has something to do with devaluation of the dollar as money goes overseas.

Little joe
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