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Politics : Politics for Pros- moderated

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To: unclewest who wrote (297686)	3/22/2009 11:09:49 PM
From: LindyBill	Read Replies (1) of 793966

Do you believe, as many do, that even with a skyrocketing money supply, we are in a period of deflation right now? This is a decrease in the price of commodities due to a fall in demand for them caused by the recession. It has nothing to do with deflation, which is a condition that happens when the money supply falls below the GNP. That's what the Fed did to the economy between 30/34 and brought on the great depression. Do you really think we will be better off if things deteriorate to the point when one euro buys 4 dollars? This will only happen if the Euros keep their money supply below the demand for it. Therebye crashing the Euro economy. This restrictive Euro supply over the last decade was the reason for it's rise in value. Made the Euro banks happy, but hurt their economy. The Demand/supply for the Dollar overseas still remains strong. It's possible for us to "Banana Republic" it, but there is no sign of it yet. You are reading a lot of bear stories. The Feds main complaint right now about the increase in money supply that they have provided is that, instead of being loaned out, it's under the Bank's mattresses.

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