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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (70516)10/26/2007 4:24:32 PM
From: rudyt  Read Replies (2) of 116555
 
The dictionary also says that 'inflation' is a rise in prices and we know thats wrong.I assume your definition of 'inflation' is a rise in money supply(including credit) so when you say disinflation your saying money supply decreased in the mid to late 90's which it didn't.

You also asked Claude how to 'justify falling home prices'
Thats the tricky thing about inflation,not everything goes up evenly at the same time.Generally everything goes up in price but some prices fall and some prices explode.Thats what inflation does it causes inbalances and misdirection of investments.So real estate has had its day in the sun and something else, probably gold or grains, will be the next to explode.As long as money supply keeps surging the money has to go somewhere.
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