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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: ChanceIs who wrote (241123)3/16/2010 3:22:11 PM
From: GSTRead Replies (2) of 306849
 
<MISH I believe is self educated in economics> When pressed, Mish defines inflation as an increase in money supply caused by an increase in money supply -- it is clear -- very clear -- and it is absurd.

One of the problems with economics is that economists are not good at being clear. Money is a good example -- it serves two purposes: 1) As a medium of exchange and 2) As a store of value. The note that you cite that Mish posted was far from clear on the velocity of money because he failed to note that money can and does have two purposes -- as a medium of exchange and a store of value.

For money to be a stable store of value it should increase along with the size of the economy. This is not rocket science. If money does not expand along with the size of the economy it tends to act as a drag on the economy. If money supply expands faster than the economy it tends to undercut the role of money as a store of value -- again, not exactly rocket science. It is about as complicated as knowing what size pants to where -- bigger pants for bigger people and smaller pants for smaller people. But Mish will tell you that any size of pants will do -- and big people can wear little tiny skinny pants if they want to -- ouch.

Mish likes to play like he knows something that most humans overlooked or are confused about. Far from shedding light, he simply adds lots of misinformation because he does not think so much as believe. If there is inflation, Mish does not 'believe it' because it does not suit his belief system.

If you really want to understand Mish it is not hard -- his ego far exceeds his knowledge base and he uses any opportunity at self-promotion to inflate his profile and drive traffic to his web-site -- this is the business that he is in -- self-promotion.
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