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

To: Maurice Winn who wrote (19491)	6/5/2002 6:59:03 AM
From: Don Lloyd	Read Replies (1) \| Respond to of 74559

M - As far as I can see, nothing you have described is a benefit. Increases in the quantity of money do tend to paper over some mistakes of policy and create the illusion of increased wealth, but, in the end, benefit some at the expense of others. For example, increasing the quantity of money keeps the prices of goods that have been produced with a greater level of productivity higher than they would otherwise be. This penalizes the workers in slower productivity growth industries as opposed to those in higher productivity growth industries by keeping their purchasing power lower simply because their particular industry happens to have lower returns on investment for the capital equipment that is required to raise productivity. This is likely to mean that the lower skilled workers are the ones impacted, even assuming that their jobs have not already been forced overseas. The only ways that minimally skilled workers can reap the benefits of an advancing economy is to be a surviving worker whose productivity (and wage) has been enhanced by machines or to benefit from the lower prices of products that he buys but does not produce. Regards, Don