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

To: bart13 who wrote (71764)	10/12/2006 1:51:24 PM
From: Tommaso	Read Replies (2) \| Respond to of 110194

>>>My basic point remains that the connection between gold and the money supply even before 1933, and certainly afterwards, was tenuous at best<<, I am afraid that this statement is not correct. The United States spent decades getting the country back onto a full gold standard after the Civil War, and this kept a pretty rigid leash on the money supply, which in fact shrank during that period. This, along with increasing productivity, made it an era of declining prices. Ever since the U. S. went off the gold standard, and especially since it stopped converting dollars to gold by other central banks, there has been nothing but inflation, with period of reduced or dis- inflation. The issue is whether continuous inflation is, on the whole, better than periods of deflation, especially severe deflation resulting in--or accompanying--a depression. I think moderate inflation probably is. People who lived through--and were affected by--the considerable inflation of the period 1970-1980 were not psychologically crippled the way that a lot of people who suffered through the period 1930-1940 were, when unemployment hit 25% and was even worse than that in its effect because many women were not even in the labor force.