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Strategies & Market Trends : Heinz Blasnik- Views You Can Use -- Ignore unavailable to you. Want to Upgrade?

To: zonder who wrote (1575)	5/20/2003 11:39:42 AM
From: GraceZ	Read Replies (2) \| Respond to of 4905

Japan bought the idea that expanding the monetary base in excess of the supply of goods and services would in fact result in what we call inflation or a persistent rise in prices (they had the best of advice from Milton Friedman in this regard). They have been expanding the money supply for the last ten years or so while their GDE sloshes around and in nominal terms turned negative for several years. They are still waiting for that second half of the definition to kick in. The fact is that if that money you create doesn't chase goods and services but instead ends up in CDs and savings deposits the expansion of the money supply doesn't wind up reducing the purchasing power of the currency. In Japan the purchasing power of the Yen is increasing by 1% a year. One could argue that potential inflation is stored up somewhere ready for the dam to crack, but if there is a crack in the dam it might be in the idea that expansion in the money supply in excess of the supply of goods and services will always cause a general rise in prices.

To: zonder who wrote (1575)	5/20/2003 12:51:22 PM
From: LLCF	Read Replies (1) \| Respond to of 4905

<LLCF:....I think I misspoke when I said 'inflation' with falling demand. I should have said: 'rising prices with falling demand'> But if you read the whole stream of posts you'll see that what I meant was imports and that there could be problems in certain [very important] sectors and specifically excluded aggregate price levels: siliconinvestor.com <<Of course only import prices would rise, so maybe not prices in the aggregate... but some real spikes in some areas could certainly occur.>> So while I'd like to just say... "Oh, I mispoke". It seems neither of us have a monopoly on taking things out of context. <zonder:.."Rising prices" = Inflation> Yes, the Austrian view differs from your's as I posted, I'm sorry if it was misleading to the extent of the difference. IMO if you read more about it, it won't appear that way at all: <<"Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term `inflation' to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise.-Mises >> Ineveitable is the operative word, and quite different from what you are saying as you can see. Others can reasonably disagree with our assertion as well: siliconinvestor.com <preferably after a polite "Mea Culpa". > Yes, my ego apologizes to the board for my inexcusable behaviour, it will not happen again. <Thereafter, I will have no problem bringing this up pretty much everywhere I see you, which will be a small price to pay for the time you made me waste and the petty insults you threw my way. > Yes, that's fine. I think everyone who bothered has a flavour for the argument, I'll drop it now. DAK