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Strategies & Market Trends : ahhaha's ahs

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To: Lhn5 who wrote (22836)	4/6/2013 2:21:16 PM
From: ahhaha	Read Replies (1) of 24758

How does money pumping CAUSE deflation? deflation = inflation. Whenever something of value inflates something else deflates, and vice versa. Can't get something for nothing. Doesn't it really just fail at causing inflation? The two quantities always act simultaneously. If the pumped money was used wouldn't it contribute to conditions that cause inflation? Pumped money causes money's buying power to deflate. But because it just sits there it does nothing. The process of simultaneous change is mostly invisible, but both end up with money sitting. Perhaps money pumpers are confident that money pumping will cause inflation which allows them to not do things that would actually encourage work and investment such as less taxes less regulation. During the inflation of the '70s (now they really knew how to inflate) real money supply declined. Declining money supply is attended by idleness. Raising interest rates doesn't necessarily cause money supply to decline. In Japan, raising rates would cause money supply to rise. Japs would get off their cradle to grave butts and do something for fear of being cleaned.

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