SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: GST who wrote (53864)2/15/2006 5:46:43 AM
From: Mike Johnston  Read Replies (1) of 110194
 
You are confused.
I bet you watch CNBC too much and read too many personal finance magazines.

With stable money supply, prices not only do not rise, they actually go down, due to increases in productivity being passed along to the consumer.

This discussion is not about supply shocks or demand spikes.
If the price of tomatoes goes up, because of weather related destruction of crops, that is not inflation. And return back to the lower price after supply returns to normal is not deflation.
Rising prices of eggs due to temporary spike in demand related to the Atkins craze is not inflation either.

However, if an average home in a neighborhood is worth $200K, only an excess in money supply and excess credit can allow and compel someone to bid $250K for it few months later. That is inflation since barring a sudden population influx or increase in building costs (again, inflation due to credit and money supply excesses) there is no reason for price of a house to ever go up.
That is why after bursting of the Nasdaq bubble in 2000, home prices instead of declining 30% , went up 300%.
This would not be possible without huge credit excesses and balooning money supply.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News