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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: bart13 who wrote (94317)5/16/2008 1:24:59 PM
From: John Vosilla  Read Replies (1) of 110194
 
Bart the St Louis Fed shows MZM has been shrinking for the past three weeks..don't have the report of the 12th yet..

'Is the Money Supply Growing or Not?

....Now, remember, Friedman taught us that inflation is a monetary phenomenon. If you increase the money supply too fast, you risk an unwanted rise in inflation. If the money supply shrinks or grows too slowly, you could see deflation develop.

Note that MZM is growing at close to an 18% rate year over year. Also note that less than three years ago MZM was growing close to zero. Since that time inflation has increased. Therefore, one could make the case that the Fed is causing inflation by allowing the money supply to increase too rapidly. Case closed.

Or maybe not. More cash sometimes means that people and businesses are taking less risk. The Fed cannot control what we do with our money, only how much bank reserves it allows and how much cash it puts into the system.

Forecasting inflation from a money supply graph is very difficult. It used to be a lot simpler, but in recent decades has been very unreliable..'

marketoracle.co.uk

funny MZM has been coming down since the deflation king wrote about it a few weeks ago<g>

globaleconomicanalysis.blogspot.com
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