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Politics : Ask Michael Burke

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To: Tommaso who wrote (37755)11/29/1998 5:36:00 PM
From: Skeeter Bug  Read Replies (1) of 132070
 
tom, if m2 was strictly controlled would we be in a deflationary spiral right now? we have all this extra cash but the companies have little, if any, pricing power... this printing may be the ying to the deflationary yang. to a point. unfortunately, we are probably in a no win situation as more extra dough is needed b/c a high % of the marginal m2 dollar is going into the market and not the economy. therefore, m2 is grown more quickly to keep the economy from hitting a deflationary spiral and a bubble market is the consequence.

with all this m2 growth you would expect inflation.

just a thought.
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