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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: gpowell who wrote (3543)	11/15/2001 9:19:38 PM
From: ahhaha	Respond to of 24758

Not much. My thesis is that the doubling of the money supply in the past six years, the $4 trillion created, went almost exclusively to the wealthiest economic participants (this term includes people and corporations both). He's an amateur. Anyone who thinks this is a coherent statement doesn't know economics. Why is that important? Because money creation, when focused on the wealthiest slice of the economy, doesn't result in a proportionate increase in consumption, and therefore doesn't drive commodity or wage inflation. Inflation isn't a demand phenomenon. More money means more spending and so industry ramps up production. More goods are the result. When these two quantities remain commensurate goods and money are in balance. Hence, no inflation. Doesn't matter who is receiving the money as far as the demand side of the equation is concerned. The question is how well can the supply side meet the demand. If there are constraints like taxes, regulation, excess labor demands, debt, or other impediments to production, added supply can't keep up with added demand coming from added money. The result is inflation. Multiply Gates' fortune 10X, for instance, and he doesn't consume 10X as much in goods and services. However, it does impact the prices of the things the wealthy exchange among each other: stocks, real estate, and other assets. It doesn't do that in the slightest. You can have a lot of money flowing into an entity, but the entity may not rise in price. It the entity is inflated, then the rich can pay and get bagged. In fact, when you have a lot of money, you have to be careful not to get bagged by others who wealthy. I think this is a simple explanation for why we've been able to have massive money supply increases (a 2:1 split in the US dollar basically) with the result being a massive asset inflation but virtually zero commodity and wage inflation, and continued declining long-term interest rates. It's simply wrong. The dough went to the low cost producers, foreign manufacturers, because American labor priced American goods out of American markets forever. The key for Americans has been to get out of that kind of business. Going forward, it means there is no pent-up inflation risk. This is going to be proved false in a very nasty way when the emperor's new clothes are exposed. That is, when the dollar mask is removed. The rest of what he says is a hodge podge of truths and falsities.

To: gpowell who wrote (3543)	11/15/2001 11:21:43 PM
From: Ahda	Read Replies (1) \| Respond to of 24758

i feel one has to look at history and it not as easy as it was to control wealth unless you are perhaps an oil sheik. I think of jermoluk and ATHM the results of his actions did two things created wealth for him and created skeptics about his ability to create wealth in future investments that had his name tied to it. If broadband fees become way above the means of most the company will not succeed so wealth reduces itself as it cant create more due to the fact it has out priced the mass. You can take this to the free market there is certain point where people will not work for less. You are either going to have a government granting welfare to most which means defunct and additional taxation to wealth. The wealth might seek elsewhere which starts out as lower costs but this can end up as less profit due to the lack of dollar potential from the populous there. Wealth there by governs itself by means of creating or avoiding its own poverty.