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To: Step1 who wrote (51428)	4/14/2000 11:28:00 AM
From: Mike M2	Read Replies (1) \| Respond to of 116759

Stephen, The Austrian school defines inflation as an expansion of money and credit beyond the supply of available savings and the needs of economic activity. In the US credit growth has hit a recent rate of $5.30 of credit for every dollar of GDP growth suggesting that much of this credit growth is fueling inflation in financial assets and real estate. The majority of credit is being created outside the banking system so it does not show up as an increase in the money supply but it does increase money velocity. for some perspective in 1929 credit growth peaked at $2.20 for every dollar of GDP growth. In the 20's much of the credit growth came from non bank source especially broker call loans. mike