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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Bobby Yellin who wrote (6617)	1/24/1998 12:27:00 PM
From: Mike M2	Read Replies (1) \| Respond to of 116762

Bobby,I am impressed with the Austrian economic school of thought but I am not an expert on the subject nonetheless I'll give it a shot. If credit is created in excess of available savings that is inflationary. The situation in Japan is bad because loans were made based upon inflated asset values not the ability to service debt. The current money supply growth in Japan is very inflationary but they may be "pushing on a string" because banks must be willing and able to extend credit to customers who are willing and able take on debt. In the U.S. credit creation has grown beyond the control of the Fed because banks can securitize their loans when they hit their reserve limits and make new loans. In the 20's bull mkt the money supply grew over 60% from 1921-29 or about 7.7% per year. I don't have the figures for the growth of the adjusted monetary base since 1990 but I would guess we had exceeded 60%(anyone out there have a figure?) but as mentioned earlier loan securitzation makes the effective credit growth higher I suspect. Here is an interesting analysis by alan Greenspan fame.org Ludwig von Mises is considered the father of the modern school of Austrian economics mises.org Mike