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

To: mishedlo who wrote (53439)	2/10/2006 8:33:53 PM
From: FiveFour	Read Replies (1) \| Respond to of 110194

<<These are very simple questions. >> These are not simple Yes/No questions. for example, take the first question: <<1) When the FED increases money supply for a prolonged duration do you expect prices of goods, services or assets to in general rise?>> There is no way to know if prices will increase or not because of the variables involved: - what is the rate of growth of money supply - what is the rate of growth of gdp - what is the rate of growth of taxes - what is the rate of growth of trade deficit - what is the rate of growth of inventories - what is the rate of growth of savings - what is the change in consumer sentiment - etc, etc, etc. Try putting that in a model, there is lots of grey area. Yes or No answer? You might as well flip a coin.

To: mishedlo who wrote (53439)	2/11/2006 3:20:36 PM
From: GST	Read Replies (5) \| Respond to of 110194

These are 18 more or less random questions that are not worth asking much less answering. Fact is, money supply means nothing outside an economic context in which that money is supplied. Knowing only money supply and knowing nothing else, you know nothing. Likewise, when you focus soley on money supply, you know nothing. The money supply CAN grow in a zero inflation environment. Inflation is a persistent increase in prices in a given currency. Deflation is a persistent decline in prices in a given currency. In an open global economy with multiple currencies, inflation rates will vary from one currency to another. Money supply is one of many contributing factors -- nothing more and nothing less.