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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Umunhum who wrote (36306)7/19/2005 12:45:46 PM
From: philv  Read Replies (3) of 110194
 
I think you would agree that in this fiat system, the money supply must increase and keep up to the GDP, or else new investments would be chocked off. Many analysts have made the point that much of the debt and money creation is not going to finance new viable business or increased productivity, rather to consumption which has no long term economic benefit.

As I understand it, under a gold standard, the price of gold would increase to reflect the increase in demand, rather than increasing the money supply under this regime.
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