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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 (53677)	2/13/2006 10:31:33 AM
From: GraceZ	Read Replies (1) \| Respond to of 110194

Well the Austrians would say that if you define inflation by a change in the general price level than you are mixing up the outcome of inflation with inflation itself. Most economists would say that to call an expansion of the money supply inflation is to mix up the probable cause with the definition of inflation, which is a loss in the value of your dollars, as measured against a broad basket of goods and services. This argument has been around a lot longer than you two guys. Who's is right? I don't know, I suppose that in the context of the Austrian School they have the right to define things in whatever way they wish even if it means little to the ordinary householder. To them, inflation is defined by the statement, "My money doesn't buy what it used to buy."

To: GST who wrote (53677)	2/13/2006 11:27:11 AM
From: mishedlo	Read Replies (5) \| Respond to of 110194

Tell Steve Saville, Heinz, Succo and Reamer on Minyanville, Shostak, and other people a hell of a lot brighter than you are that they are nuts. BTW my definition of money is rather broad. It includes both monetary injections by the FED as well as expansion of credit allowed by fractional reserves and created by GSEs etc etc. I still want you to define exactly what your basket of goods is to measure inflation. If you can't measure it, how do we know what it is? How do we know how much "purchasing power" has dropped? So I ask you once again. 1) What is your reference basket of goods and services? 2) Might not such a basket favor some groups over others? 3) How do you account for improved quality? 4) How do you account for products that exist today but did not exist years ago? 5) Who is the ultimate arbiter of quality? 6) How is the stock market reflected in your basket? Have at it. I keep asking and I keep getting no answers. Point blank you probably can not tell within 5% what inflation is with any sort of general agreement. Ask Grace what she thinks it is. Compare to what you think it is. I bet the two of you are off by 5%. 7) Are you the all knowing genius arbiter of quality and basket selection? If not you, then who? 8) If you can't measure it, how does the FED set interest rate policy? Come on, step up to the plate and answer some questions for a change. Here it is in a nutshell for you GST. Reckless expansion of money and credit is the problem. The solution is to stop reckless expansion of money and credit. The solution is not to target prices which simply can not be accurately measured, nor can a reflective basket of good and services be properly designed and weighted in the first place. Since you continue to believe otherwise, I want you to answer the questions you keep ducking. Mish