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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: GST who wrote (88489)11/5/2007 8:14:20 PM
From: bart13  Read Replies (1) of 110194
 
We're off into semantics on defining "inflation to be money supply". We can dance around what money is and what credit is and what inflation is and whether CPI or CPI+lies is a valid measure of inflation too...

But the data since 1875 incontrovertibly shows the very strong correlation between M2, M3 & CPI+lies. If you want to characterize a chart covering over 135 years and what it shows as an isolated view (and without providing any better answer or data) then be my guest.

The bottom line is that chart and similar charts I could put together since roughly 1970 would show an extremely clear correlation between M2 or M3 and corrected CPI in the Euro area and yes - even Japan too. You can even see it in my world money charts on my Central Bank watch page. It includes a world chart including as complete a data set as I could find from the US, Euro area Japan & China.
If there was as complete a data set for the Euro area or Japan as there is for the US, provide it to me and I'll show you the correlation there too - either by country or by all countries.

And again, all I'm saying is that money supply is the primary item *and* that its not the only one... but if you want to interpret what I've said as only considering money supply, there's little more I can say.
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