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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (15686)	12/31/2003 1:06:27 AM
From: Elroy Jetson	Read Replies (3) \| Respond to of 306849

You shouldn't post public notes so soon after you've been drinking.

To: GraceZ who wrote (15686)	12/31/2003 1:20:27 PM
From: Follies	Read Replies (1) \| Respond to of 306849

Your calculation of dividing the money supply into the nominal GDP doesn't give you the inflation rate. If you divide money supply by GDP, what do you get? A dimensionless number, e.g., so many dollars divided by so many dollars I think this is wrong, I dont think it is dimensionless, but I decided to just look at the data and I am a bit surprised. The double digit inflation (13.9%, 11.8%) of 1980 and 1981 was not accompanied or preceeded by an increase money supply (MZM) relatively to the change in GDP. GDP increased 0.% and 2.2% whereas the money supply only increased 1% and .5% What is strange is the money supply jumped 14% and 21% in the following two years (1982, 1983)! The money supply is currently increasing at 15% . Even if the GDP is growing at 8%, I think it will create a rise in prices. The inflation of the money supply must result in increased prices and a devaluation of the currency.