03/20/2008 4:52:49 AM PDT
· 7 of 7 Twodazzle
to calvin-ist-ich
True, demand does tend to increase with economic growth as more consumers have more discretionary funds available to gain access to wants.
However, strong economic growth also entails an increase in supply of the goods or services to fill the vacuum that the current demand is placing on the market. Whether it be through expanded production or increased competition, the investment in increased production will eventually outpace increased demand until the investment dollars are diverted to better financial opportunities.
The bottom line is, printing too much money causes inflation whether the market is growing or in recession.