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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Thomas M. who wrote (14214)	2/17/1998 1:17:00 PM
From: Mike M2	Respond to of 18056

Thomas, to many people inflation is simply an increase in consumer and producer prices. To economists of the Austrian school like Freidberg, inflation is an expansion of money and credit beyond the needs of economic activity and the supply of available savings. In the present situation the monetary inflation manifests itself in the financial markets. My little webster's dictionary defines inflation as an abnormal increase in the volume of money and credit resulting in a substantial and continuing rise in the general price level. This definition overlooks the historical fact that monetary inflation does not necessarily lead to price inflation -look at the US in the 20's the money supply grew 61% from 21 -29 yet price inflation was negligible. The japanese bubble economy of the 80's saw massive inflation in in financial assets and real estate but not in consumer goods. I will comment more later. mike