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

To: mishedlo who wrote (16366)	11/20/2004 12:30:45 AM
From: Elroy Jetson	Respond to of 116555

The Mises people believe money supply should be a modified form of MZM, which excludes investments - including those which can be readily converted into cash on demand. Using the Mises special revised version of MZM, the money supply is actually declining. None of the conventional versions of the money supply, calculated by the Federal Reserve, show any decline at all. They do, however, show a decline in the rate of increase of the money supply. Home prices rising more slowly is not the same thing as home prices actually falling. While one condition may presage the other, they're not the same thing. It's exactly the same with the money supply. Ultimately a Monetarist economic system will be unable to further increase the level of debt: either because the income will not support additional debt (even at ultra-low interest rates); or the popular enthusiasm for debt cannot be sustained. At this point the wheels fall off the Monetarist Trolley and the process of de-leveraging commences. .