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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (50923)1/23/2006 12:57:50 PM
From: GST  Read Replies (1) of 110194
 
<productivity improvents can mask TRUE inflation (defined as an increase in money supply and credit).>

Again you resort to a silly definition of inflation divorced from prices. As for productivity improvement, it does nothing of the sort. Productivity is simply a matter of improving the efficiency with which we turn inputs into outputs. Productivity provides opportunities for growth -- but of course it is not automatic that growth follows. Productivity creates the possibility of growth by freeing up resources for other uses. Money supply grows to provide an exchange medium for potential real growth. Money supply that grows apace with productivity has a low probability of being inflationary -- Mish you can't even take care of the basics let alone deal with a broader "model" of what has happened or will happen.
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