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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (14985)	11/6/2004 12:42:57 AM
From: Elroy Jetson	Read Replies (1) \| Respond to of 116555

Yes, of course deflation is possible with a rapidly rising money supply. Only sad little Milton Friedman and his little sock-puppet, Ben Bernanke, believe deflation can be prevented or reversed by dropping money from helicopters.

To: mishedlo who wrote (14985)	11/6/2004 9:42:07 AM
From: wwoob1	Read Replies (1) \| Respond to of 116555

Mishedlo, Average Japanese has a lot more savings than average American, so they don't spend the expanded money supply which sits in the lousy banks to boost their reserve against RE loss. The expanded money supply created by Greenspan is used to boost paper assets which support the Americans' consumption. So inflation is inevitable with a falling USD. It will fall even faster if the Asian banks stop buying IOUs. There is lot of poor Asians in those countries who can use the goods exported to the US. So less supply for Americans if the Chinese manufacturers look inwards. What is wrong with this thinking? ob1