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To: ahhaha who wrote (34704)	5/31/1999 2:39:00 PM
From: The Barracuda™	Read Replies (1) \| Respond to of 116767

>>>Government doesn't create inflation. The will of the people does. Government only lets the will reign to varying degrees.<<< By what means does the gov't allow this?

To: ahhaha who wrote (34704)	6/1/1999 1:02:00 AM
From: Bob Dobbs	Read Replies (3) \| Respond to of 116767

Ahhaha: You have a fresh, innovative view of economics and I largely agree with you, however I wanted to discuss some points in your latest. <<The prices of goods would have risen regardless of FED activity. A good which must be produced will have to rise in price since its production cost has risen.>> This is a logical fallacy. Assume a snapshot where money supply and goods supply is constant. Assuming the demand for a single good does increase, and more money chases it and it rises in price. BUT what about the rest of the goods? There is LESS MONEY AVAILABLE TO CHASE THOSE OTHER GOODS and consequently, their price DECREASES. On the whole, then, the average price is the same! There is no "inflation". This topic is taken up in the fabulous book "The Alpha Strategy" by Jack Pugsley. <<There was no massive inflation during the 19th or any century before the 20th.>> There was massive inflation (loosely interpreted as an increase in the price of goods) over virtually every century in man's history due to debasement of coinage and other factors. Witness the inflation during the Thirty Years War in 1622. How bout the massive influx of gold to Europe during the Spanish Conquest of the 1500's? Bob