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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: GST who wrote (50494)	1/20/2006 6:36:38 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

inflation/deflation IS about money supply. Even those that think pricing comes first admit it. dictionary.reference.com A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services. That is the KEY sentence CAUSED by increase in currency and credit. I think that has the cart before the horse but nonetheless you mock me as if they are not related at all. My contention and you certainly can not prove otherwise is that it is IMPOSSIBLE to know why the price of goods are rising or falling. Peak oil is one example and a good harvest or poor harvest (weather related) is another reason. Productivity and outsourcing are more reasons. The problem is also compounded by quality improvements. In aggregate no one can come close to saying correctly what prices are doing or why even though the definition clearly states caused by an increase in available currency and credit beyond the proportion of available goods and services. Is not an expansion of money supply alarming to you even if prices do not go up? It should because that is what fueled the dot.com bubble. Targeting prices is a mistake and simply can not be accomplished. Now lets look at deflation shall we? A persistent decrease in the level of consumer prices or a persistent increase in the purchasing power of money because of a reduction in available currency and credit. Like inflation, Austrians would argue that the cart is before the horse, and correctly so. Still, the key phrase is because of a reduction in available currency and credit. You sit on your freaking high horse acting as if they are not related when it should be obvious that they are related. Your little "model" if one can call it that looks at the US dollar in isolation ignoring a zillion other factors and you mock me. Get real. Mish