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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: pogohere who wrote (50626)1/21/2006 10:53:58 PM
From: GST  Read Replies (1) of 110194
 
Mish is not even in the ballpark to understand inflation and deflation in a global economy for two reasons:

1) The terms inflation and deflation have zero meaning unless they include reference to prices. If you think every addition to money supply is inflation, period, then you are nuts. Same thing for deflation -- a contraction of money supply does not constitute deflation.

2) Money supply in a single country is only one of many factors in determining prices and purchasing power in a global economy. Our prices, denominated in dollars, do not depend solely on our money supply. We import $2 billion dollars a day in capital. A currency crisis in the US is fully capable of creating conditions for shrinking money supply AND rising prices. Mish can't handle that because his view of inflation is so extraordinarily simplistic -- i.e. money supply = inflation.
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