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

To: NOW who wrote (53909)	2/15/2006 1:57:50 PM
From: GST	Read Replies (2) \| Respond to of 110194

The looming "deflation" scenario is based on a set of absurd assumptions concerning how a contraction in money supply in the US will lead us into a massive deflation -- a completely circular argument if you say that a decline in money supply is deflation. If there is a contraction in US money supply and a sharp spike in prices in US dollars is that inflationary or deflationary? A sharp spike in prices in the event that there is a sharp contraction of US money supply is impossible if you believe the ideology of the "money supply is everything" zealots. Point of fact, it is not only possible, it is the most likely scenario and it is gathering force as we speak. If prices in US dollars surge in coming years as money supply contracts, you decide for yourself if you want to call that inflation or deflation. For me, a persistent increase in prices is inflation. For some here on this thread, prices can double or triple and they will be comfortable calling that deflation. Decide for yourself who is being silly. I already have.