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

To: GraceZ who wrote (53715)	2/13/2006 1:36:51 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

BTW if we used money supply as a measure of inflation and backed that rate out of the nominal GDP, we'd have been in an economic contraction since the early sixties. Some nuts like you might think this is the case, but no serious economist would characterize the US economy as such. Inflation can raise asset prices such as stocks instead of the production of goods. GDP itself is a hopelessly flawed measure in and of itself because of hedonics and imputations. What we can say right now however is that it is taking more and more and more credit expansion to produce any rise in the GDP. GDP will implode (flawed or not) when credit expansion stops. That time is at hand IMO. Mish

To: GraceZ who wrote (53715)	2/13/2006 1:37:42 PM
From: Elroy Jetson	Read Replies (2) \| Respond to of 110194

Inflation is the excess increase in credit and money. You believe that inflation should be measured with a "special basket of goods" manipulated to under-count the rise in prices. Monetarism looks like prosperity only when inflation is under-counted. Under-counting inflation creates the illusion of "productivity growth" and "economic growth" far beyond what actually exists. When inflation is counted correctly, the illusions of productivity and growth, created by excess credit creation, vanish in the inflation adjusted statistics. .