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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Wyätt Gwyön who wrote (44741)11/3/2005 10:53:51 PM
From: mishedlo  Read Replies (3) of 110194
 
so Mish, exactly how are the following deflationary? from the latest ISM report, via CI

How are they inflationary?
I think we have had this debate before.
To the extent that oil and products (plastics fertilizer etc etc etc) are going up because of an increase in money supply, they show the EFFECTS of inflation.

To the extent that those prices are rising because of scarcity they show nothing of the kind.

Furthermore, to the extent that rising prices slow down the economy causing loss of jobs, bankruptcies, the affects of those price rises are indeed deflationary.

Now if you can tell me that money supply is rapidly expanding here and the price of oil is going up because of that rather than because of peak oil or geopolitical factors then the ISM report is indeed showing the affects of inflation.

I do not believe that to be the case.
Real money supply inflation adjusted is actually contracting.
Money supply growth out and out has fallen dramatically.

Mish
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