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

To: Elroy Jetson who wrote (56184)	3/18/2006 2:45:02 PM
From: GraceZ	Read Replies (2) \| Respond to of 110194

You could just leave the money supply alone, as I remarked earlier it shouldn't be any more difficult to adjust to a low rate of decline in prices anymore than it is to adjust to a low rate of inflation. Politically your scheme will never happen or if it did, it wouldn't be left that way for long. The reason is simple, as transactions scaled up and the stuff that money represented multiplied, each dollar in the supply would be worth a little more each year. People like you with money capital would experience an increase in the value of that money capital without doing anything with it. This would result in even more articles in the NYT detailing how the idle rich were getting richer and richer without doing a damned thing while the poor with no savings or inherited wealth were getting relatively poorer because in nominal terms their wages are falling every year. Inflation is how governments appear to steal from those with capital and give it to those who borrow. The rich steal it back with interest of course but the political desire of the masses is to move wealth from rich to poor. This always results in everyone getting poorer but the masses don't care as long as they can pull the wealthy down. As long as we have a war on wealth and the masses see concentration of wealth as a national threat we will never have an inherently deflationary monetary policy.