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

To: GST who wrote (82684)	6/13/2007 3:13:36 PM
From: skinowski	Read Replies (2) \| Respond to of 110194

I am not an economist either, but I can see that if the total sum of money and credit would remain constant, the prices - in aggregate - would have to truly stable. If they would go up in one segment, they would have to go down in another. As the total volume of goods and services increases, the prices would have to decline, in fact. Otoh, unrestrained growth in the available money and credit may be, in fact, indistinguishable from inflation. What would "drive" it? The printing press, and easy credit. My understanding is that - in theory - CB's try to achieve price stability by increasing the money supply so as to accommodate the increases in the economy and in the volume of goods and services. Since the purchasing power of the dollar has been declining over the years, it is obvious that they have not done a good job.

To: GST who wrote (82684)	6/13/2007 3:19:55 PM
From: John Vosilla	Read Replies (1) \| Respond to of 110194

So many facets of the inflation picture to me. This begs the question if the government has been desperately encouraging asset inflation and underreporting price inflation for many years what are the ramifications when the cat gets out of the bag and the holders of all that debt aren't willing to lend on extended asset values with such a low credit and inflation risk premium? You can't just accelerate monetezation of the back end forever with no ramifications? Or can you?