"5) Inflation? What inflation. It is nearly zero!"
Monetary supply figures, M3 & MZM for instance, have been increasing.
posted on 08/21/2002 6:10:39 AM PDT
The same people who claimed a budget surplus for the next thousand years or so do the inflation figures. I feel so much better.
posted on 08/21/2002 6:37:26 AM PDT
We've had this debate on several threads. Take ANY measure of money, so far this year, and compare it to productivity. You have DEFLATION.
There is NO, I repeat, NO consistent sign in any of the traditional "thermometers" of inflation: oil prices, gold prices (which are up very slightly, and only over a very short period), or interest rates, which are at post-Depression lows.
When you have home mortgage rates at 6.7%, that, my friend, ain't inflation.
posted on 08/21/2002 7:15:08 AM PDT
Dukie - increases in the monetary supply are not, in and of themselves, necessarily inflationary. Inflation/Deflation are monetary phenomenons that relate to the demand for money. When demand for money grows and it is not supplied (via the money supply), money becomes more valuable and is not spent but conserved. When too few dollars are chasing too many goods, you have deflation. the exact opposite is true for inflation. In this case, is M3 and MZM are increasing but not enough to meet the increased demand, you have deflation. That is what we have been seeing for the last 5 years.
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