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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: John Vosilla who wrote (122051)5/10/2008 9:20:12 AM
From: SouthFloridaGuyRead Replies (2) of 306849
 
Sorry John, I respect your views, but MZM has 0 correlation to inflation rates. In fact, typically the rate of MZM growth accelerates into recessions.

If you want to look at whether the FED is "printing" or not just look at the base money supply. The FED does not create credit nor does it destroy it.

Now I cannot say the same for other nations (I have not looked closely), but I do know that high capacity utilization rates in other countries are a cause of global inflation. If other countries consume too much (relative to commodities supply), that would adversely affect our inflation rates, but it would not mean that our policies are the cause of inflation nor does it mean we should adjust policy to "fight" inflation. We are in fact in a deflationary cycle.

As far as recessions go, the classical recession is one where business spending contracts and capacity utilization drops (below 80% is a key signal). That appears to be happening and hence I expect economic growth to get increasingly worse despite the blather on CNBC.

Given foreign countries reliance on US CAPEX, I would also think that there will be global recoupling and hence inflation rates will drop (along with commodities).
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