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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: John Vosilla who wrote (68553)8/20/2006 7:05:56 PM
From: bart13  Read Replies (1) of 110194
 

Bart what about the mortgage/home value effect I also referenced in the prior post?

Take the war effort, energy prices and home prices together and their impacts on inflation, liquidity and credit creation.. Where would we be on the liquidity pump today if we were still back to say 2000 levels when the budget was balanced, no wars, energy prices one third of today and home prices half of today?


I think the issue here (best guess, I may be misunderstanding your question) is that I'm in Mish's, Russ's or Friedman's, etc. camp - inflation is always and everywhere a monetary (excess creation) phenomena. Energy and home and commodity etc. prices in my opinion are in general an effect of inflation, not a cause.

Another view - if the budget was balanced, there were no wars, etc. - the various central banks would still be inflating since its the primary part of their vested interests, but probably at a lower rate than they are now.

Did I answer the question?
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