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To: mishedlo who wrote (75677)	12/15/2006 1:58:17 AM
From: pogohere	Respond to of 110194

Inflation a monetary phenomenon fundamentally connected to price rises? I'm shocked, shocked!!! Round up the usual suspects. Oh, you already did. Nice post Mish. Thanks.

To: mishedlo who wrote (75677)	12/15/2006 8:28:03 AM
From: TimbaBear	Read Replies (1) \| Respond to of 110194

Mish....has it occurred to you that virtually all of the quotes you cited in support of inflation being a monetary phenomenon came from people in positions where, if they had that belief, they would enhance the power of their jobs? Fed speakers, ECB, Central Bankers...... It's like asking a group of bank robbers whether they thought it was ethical to rob banks..... I don't think anyone is arguing that inflation is divorced from monetary policy, just some of believe that sometimes other factors come into play which may even override the monetary in impact. The "true believers" of any dogma are always prone to be blindsided by events that don't dovetail into their dogma. They don't see the events coming because they don't have open enough minds to accurately assess the incoming data that would be at odds with their dogma. Timba

To: mishedlo who wrote (75677)	12/15/2006 10:09:25 AM
From: GST	Respond to of 110194

Mish -- what a joke -- not one of these people agreed with your statement -- not one. Each of them puts primary emphasis on monetary policy to explain changes in price levels -- not one of them says that inflation is money supply. Do you know why? Because they would look like idiots. But they are not idiots, they are merely monetarists who believe that inflation, i.e. persistent changes in price levels, is closely related to changes in money supply. But you don't do that -- you say that inflation is not prices it is money supply, and that is pure unsupported lunacy. Once you define inflation to be money supply, then you have the idiotic circle completed -- inflation causes inflation -- increases in money supply causes increases in money supply. You are way out on a limb disconnected from any tree -- there is no support at all -- none -- for your assertion that "inflation is an increase in money and credit". What sane people want to know is what drives price levels in a given currency. That is the issue in inflation and deflation. Take away prices as the central thing to be explained and you have nothing.