Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: GraceZ who wrote (2290)	6/10/2003 12:24:44 AM
From: eddieww	Read Replies (1) \| Respond to of 4905

"During the '70s the real money supply fell." What do you mean by "real money supply"? Certainly, M1, M2, & M3 expanded very quickly in the 1970s. economagic.com M1, M2, & M3 weekly growth rates from 1959, MZM from 1974.

To: GraceZ who wrote (2290)	6/10/2003 12:37:16 AM
From: LLCF	Respond to of 4905

First of all the post was showing Mises opinion of the definition of inflation IS NOT: <<"Rising prices" = Inflation>>, and was not held out to be an argument that it is 'correct'. Too tired tonight, but I'll bookmark the page and we can talk later.... assuming one of the other 'Austrians' doesn't beat me to it -gggg- I will say that there are plenty of folks who disagree with your opinion however, and you could start however with backing up: <Von Mises was wrong since there have been extended periods of rising money supply without inflation. Also, there have been extended periods of declining money supply with definitive inflation.> And the meaning and relevance of: <<During the '70s the real money supply fell.>> BTW, you are using 'inflation' to mean CPI increases, no? Your statement is a direct contradiction from their perspective. Remember also the Austrians tend to look much broader, for example they often point to asset inflation. <How long before Von Mises' theory can be considered to have failed?> Well, some think it's been intact through the 80's anyway: "Sometimes I think that the job of central bankers is to prove Kurt Richebächer {Austrian} wrong." -- Paul Volcker, Fed Chairman under Ronald Reagan -ggg- DAK

To: GraceZ who wrote (2290)	6/10/2003 2:51:44 AM
From: Don Lloyd	Read Replies (1) \| Respond to of 4905

Grace, >>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.<< But it isn't an inevitable consequence. Just when does that consequence follow money growth? Just when does one throw in the towel on the presumed "inevitable consequence"? How long before Von Mises' theory can be considered to have failed? You and Mises are both correct. It is not inevitable that prices, ignoring the impossibility of accurate measurement, will rise in response to an increase in the supply of money. There are four general variables that determine goods prices. 1. The supply of money. 2. The supply of goods. 3. The demand for money. 4. The demand for goods. While an increase in the supply of money, inflation, by Mises' definition, will always tend to increase the prices of goods, or alternately, reduce the purchasing power of money, that increase can be offset by a combination of an increase in the supply of goods, an increase in the demand for money (actually a demand for the future purchasing power of money), and a reduction in the demand for goods. Regards, Don