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.

Non-Tech : Deflation -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (221)	1/17/2004 10:45:47 PM
From: JF Quinnelly	Read Replies (1) \| Respond to of 621

What's the interest rate on the Australian dollar? I heard someone making the case for commodity based economies, which I understand Australia to be. And apparently they haven't expanded their money supply like the rest of the first world. The Fed appears to be worried about deflation lurking somewhere- maybe in the manufacturing overcapacity in Asia. One of the effects of American fiscal and monetary policy has been to encourage excessive investment in manufacturing in Asia, and this has a deflationary effect worldwide. It's possible that without the Fed gunning the money supply we would be experiencing deflation in the U.S. The rapid increase in credit over here masks deflation by generating enough inflation to counter its effect- this is the Austrian analysis of what happened to the U.S. in the '20s. I dunno if it applies right now, but there are similarities. Since the dollar isn't tied to gold we shouldn't see a repeat of the '30s.