If I remember correctly (and I do), it wasn't only the dems who've been passing these spending bills so cut the stupid partisan bullshit already.

Seriously.

I have just explained in the same post why that is not always true. They are two different concepts and an increase in money supply is NOT the same thing as INFLATION!!! .

I see what you are saying.

Could an influx of cash help people pay debt if they are diligent? Even if that increase in MS only temporarily adjusts i rates down and allows them to reallocate debt. I say yes.

No, they are not "the same thing", but they are not completely independent of one another. Money supply has a DIRECT impact on inflation, even according to the website you're so fond of quoting from.

You're saying money supply doesn't cause inflation, and you're just plain wrong. IT absolutely does, and everyone but you seems to recognize it.

You're telling me that inflation isn't the result of increased supply of money, even though the web site you keep pasting from says it is, economists say it is, even the head of the Federal Reserve says it is. In short, everyone knows that pumping more money into the economy CAN and probably will cause some sort of inflation. Whether it's monetary inflation, or whether that monetary inflation leads to price inflation, it's inflation and it's caused by increasing the supply of money.

Inflation is INDEPENDENT of changes in money supply. An increase in production costs, labor costs, raw materials, exchange rates, taxes, reduction in supply, increase in aggregate demand, all conribute to inflation and have NOTHING to do with the money supply.

You are wrong. Increasing the money supply CAN cause inflation (and most certainly will with regards to the Fed and their current policy) - HOWEVER increasing the MS does not HAVE to cause inflation.

Printing money when the demand remains unchanged or is decreasing will cause inflation ceteris paribus. Ceteris paribus - Printing money when the demand for dollars is increasing will cause the 1. value of the dollar to increase, 2. stay the same or 3. decrease depending on whether 1. not enough money is printed to satisfy demand 2. the exact amount of money is printed as is demanded 3. more money is printed then the demanded.

Check out this link, Its going to explain inflation in terms just about anyone can understand, pay particular attention to the example on the island. It explains clearly why things like production costs, labor costs, raw materials, exchange rates, taxes, reduction in supply and increase in aggregate demand DO NOT CAUSE price inflation

http://www.silverbearcafe.com/privat...inflation.html

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It is far easier to ignorantly control others than it is to wisely control yourself.

I read your article. Why he chose a perishable item (fish) for money has me scratching my head. Now it is time for you to do some work.

Explain what happens when a woman washes ashore of my island and Menard and I have kids with her, and they have kids and so on. Before you know it there are 100,000 of "us" on the island (the womans family is know for multiple births).

Do they produce or do Menard and I do all of the work with our same output as we had when it was just the two of us? Do we increase the money supply (fish) as the population increases? If the money supply is expanded at the EXACT same rate as population growth is there inflation?

So he uses perishable fish, Dollars are made of paper and are perishable also.They burn easily and if left to rot outside will decompose quite readily. Precious metals are the ultimate money. Its just an example because its very easy to understand.

If everyone fishes, then there is MASSIVE inflation as there will be 100,000 fish for each loaf of bread. But that would not happen its not possible, markets will find equilibrium. Half will bake bread and half will fish if those are the only choices, in which case there would be no inflation. If everyone bakes bread there would be massive DEFLATION, as the Fish would become worth more and more bread. So just adding people into the mix does nothing to inflation , only creation of money can affect it.

What makes you think that adding people and at the same time adding money would not create inflation? I Don't understand your logic here, adding more people only creates more demand, which drives up prices when there is no complimentary increase in supply. But that isn't inflation either its just law of supply and demand, inflation is the process by which ALL items increase in price.

__________________
It is far easier to ignorantly control others than it is to wisely control yourself.

idk. interest rates have remained very low for a lil while now, but we've been headed in this downward spiral for so long. I see this doing nothing but squeezing the little people in the private sector. And I agree- all these bailouts are doing, is reallocating wealth. to the government or major financial firms that are "too big to fail," <---amazing how americans buy into this concept, that a company is ever too big to fail. understand that under our financial system, this means that smaller companies are too little to save...and the money that went to the too-big-to-fails, are failing anyway.

But mostly, all these bailouts do is fuck us over while reallocating wealth to the central banks/government, who aren't even afflicted by the sour economy

once again, when the money supply is increased by over 70%, ya can't help but intuitively think the dollar WILL lose value, and there's only 2 options left for the fed/treasury to prevent total collapse:

1. increase interest rates and taxes (carbon taxes!!!!), to suck the money back in so the dollar WON't collapse (placing tremendous strain on middle and lower classes)

2. drop the dollar and introduce a new world currency (which i feel the central banks DO want to secure global financial control)...I think it's simply a matter of time till our currency collapses and a new currency is introduced. this will really bridge the fascism gap full-circle, with the same central bank controlling the world financial system/politics. Get to know the obama crew- they're all members/former members of major financial firms and/or the federal reserve itself


the amount of currency vs amount of production is what really predicts amount of inflation.

hyperinflating the currency, as WE'RE doing, since we're a country of consumerism and not production (and our trade w/productive countries is falling OFF the map) is gonna decrease the value of the dollar, and it'll basically take MORE of your dollars to afford products, without an increase in wages.

there's a reason why inflation never exceeded past 15 cents since the american revolution in 1776 till 1913. now the value of the currency is all over the map, and it's because we've handed the printing powers to the federal reserve, without much oversight whatsoever.

constitutionally, CONGRESS is the ONLY entity allowed to print the currency of our nation. But what's the constitution mean anymore? Most americans are clueless

Thank you for not answering my questions.

I just found it funny that he used the MOST perishable item to serve as currency. Coupled with the fact that the currency is consumed and replenished daily. Not well thought out IMO. But whatever I get what he was trying to say.

This is oversimplified because we know that there were more products than loaves and fish on the island. But assuming that the population is equally allocated across the sectors the below statement will ring true.

If half - 50,000 people catch 2 fish per day and 50,000 bake 2 loaves of bread per day and fish is "money" then the money supply has increased by 50,000 times from when it was just two guys!!! It went from 2 loaves per day to 100,000 loaves per day and the money supply (fish) has increased from 2 fish per day to 100,000 fish per day!!! Yet here would be ZERO inflation (WHICH IS EXACTLY WHAT I HAVE BEEN SAYING)!!! You CAN INCREASE THE MONEY SUPPLY WITHOUT CAUSING INFLATION.

I just outlined it above. If the money supply is increased at the exact same proportion as population growth there is ZERO INFLATION OR DEFLATION. If you do not increase the money supply with the example above you have 2 fish and 2 loaves of bread to divide over 100,000 people!!! The deflation would be so great that you would not have currency SMALL enough to conduct transactional business (which after all is the purpose of money).

Let me use some real numbers so that I can illustrate.

http://www.federalreserve.gov/releas...st/h6hist1.txt
http://en.wikipedia.org/wiki/Demogra..._United_States

In 1960 there was give or take $140,000,000,000 in M1 and a population of 179,323,175 or $780 of M1 for every American. If the money supply were not increased from 1960 there would only be $464 for every American in 2007 and down to $244 in 2100. What do you think will happen to the price of goods and services with a FIXED monetary supply and an EXPONENTIALLY growing population / demand?