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

To: benwood who wrote (75544)	12/13/2006 3:20:06 PM
From: GST	Read Replies (1) \| Respond to of 110194

All I care about is the conclusion -- the more our economy slows the more it will undermine the dollar and drive prices higher.

To: benwood who wrote (75544)	12/13/2006 3:29:11 PM
From: loantech	Read Replies (1) \| Respond to of 110194

Real simple to me.I admit both Mish and GST know much more than I but: I just checked out this exact pair of shoes for my wife we got last year for $129.00. Now they are $139.00. That is a 7.7% increase. Last year she and I each received about 3% raises. I call that increased cost of shoes inflation vs. wages and don't give a damn how much the fed has printed. Shoes are not the only thing, insurance, heat, gas, most food.(Mish may argue that but he is wrong I have done the family grocery shopping each week for 25 years.) With an increased cost of goods to a consumer like me on a budget who receives wages that is INFLATION.If you want to quit arguing just say things cost more vs wages for most of us. No I don't work for Goldman Sachs.

To: benwood who wrote (75544)	12/13/2006 4:44:21 PM
From: gpowell	Read Replies (2) \| Respond to of 110194

The Austrian definition of inflation, as I understand it, is a monetary phenomenon. There isn’t really a consensus on the definition of inflation in the Austrian school. A younger Mises defined inflation in terms of the price level, but an older Mises defined it purely in terms of the stock of money. Rothbard defined inflation as an increase in money substitutes - in other words, an increase in base money is not inflation. Hayek used the younger Mises definition. What sets the Austrians apart from neoclassical (monetarists are neoclassical) and classical theory is in a belief in the non-neutrality of money in the long-run, i.e. the belief that any increase in the money supply and credit has long-run effects on the economy. Currently, all economists believe that money stock fluctuations have short-term effects on relative prices, but many believe in the long-run neutrality of money. Consequently, money stock fluctuations will eventually be evident in the price level, but not in relative prices or real income. Austrians would argue that relative prices and real income are always and forever changed by money stock fluctuations. And thus we get to the belief by many Austrians that using index numbers (CPI for instance) can’t accurately measure the actual and potential impact of monetary injections. The mere defintion of inflation, as should be evident, informs none of what really matters to Austrians.