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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: ballsschweaty who wrote (67790)	8/19/2007 1:41:12 PM
From: daveinmarinca	Respond to of 116555

M3 growth according to this chart < nowandfutures.com > has been constant at roughly 13+% for around six months. I found that to be quite amazing....actually responsible behavior. Friday morning's action popped that bubble. "For Bernanke to avoid a recessionary credit contraction at this point, he will literally have to drop money from helicopters onto the front lawns of millions of people"....they do it for their buddies....why not you and me?....I guess that's a really dumb question :<)

To: ballsschweaty who wrote (67790)	8/19/2007 4:02:40 PM
From: pogohere	Read Replies (1) \| Respond to of 116555

he will literally have to drop money from helicopters onto the front lawns of millions of people. Loaning more money to his banking and Wall Street cronies won't cut it. Exactly. So my question is: unless the above happens one way or another, how will retail sales and the price level be maintained or rise? I.e., how do we get to an inflationary effect on prices via this reliquification? In the inflation of the late 1970s, there were unions bargaining for higher wages regularly, and getting them. So consumers had the wherewithal to pay higher prices. They also had savings and much less encumbered assets. Today, all of these factors are missing in action. What then keeps us from a deflationary repeat of the Depression even if the banks and hedgies are reliquified? The irony here appears to be that Bernanke, a "student" of the Depression, is in the position of having to deal with a bank run by funds on banks that is eerily reminiscent/analogous of/to the bank run in the Depression by individuals. If real cash doesn't show up shortly in the hands of consumers, substitute forms, i.e., precious metals, will have their day in the sun, albeit only for a season, just as they did in the 1930s.