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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (5866)	7/15/2001 5:43:58 PM
From: Don Lloyd	Read Replies (2) \| Respond to of 74559

tippet - ...There is a common misconception that the volume of money must grow with economic activity for growth to continue. Complete nonsense. Yes. Austrian theory states that any reasonable amount of money will support any reasonable level of economic activity. What will happen is that the purchasing power of money is always varying, even without a direct policy cause. If there is an increase in the demand for money to hold in cash balances with no increase in broad based money supply, the purchasing power of money will increase. However, since the desire to hold cash is really a desire to hold goods purchasing power, the effect is partially self-restraining. Regards, Don