Sometimes it’s good to reread stuff!

[CA renter]

[quote=jpinpb]Rich – the chart you linked is M2 – Money stock. That’s what’s actually in circulation?! Then why are we not seeing inflation right now?[/quote]

I think we are seeing massive inflation right now.

If the Fed/govt hadn’t printed trillions of dollars into existence and backed/bought trillions of dollars worth of “toxic” securities, what would prices of stocks, bonds, residential and commercial RE, commodities, etc. look like right now? IMO, *that* is where prices would be without all the various forms of stimulus and intervention.

The fact that prices literally whipsawed back from 2009 lows (and they were probably heading lower from there) and still remain at these high levels, even though our “real” economy is showing record weakness, is evidence of massive inflation, IMHO.

When prices are higher than they should be, due to massive amounts of stimulus and intervention (even if they are lower than during the peak of the largest credit bubble in the world’s history), that is inflation.

[moneymaker]

Yes good point, and it is this thought that scares me when I think about putting my money back into the market.

[moneymaker]

Yes good point, and it is this thought that scares me when I think about putting my money back into the market.

[moneymaker]

Yes good point, and it is this thought that scares me when I think about putting my money back into the market.

[moneymaker]

Yes good point, and it is this thought that scares me when I think about putting my money back into the market.

[moneymaker]

Yes good point, and it is this thought that scares me when I think about putting my money back into the market.

[jeeman]

Money supply + credit = inflation.

Credit has been dialed back big time in the last couple of years, and demand has dropped due to that (for homes, cars, TVs, etc).

Look at 1996-2008: the money supply was fairly constant, hovering about $800B, but credit was getting looser and looser, increasing money velocity, and we had inflation.

So money supply alone would not cause inflation.

[jeeman]

Money supply + credit = inflation.

Credit has been dialed back big time in the last couple of years, and demand has dropped due to that (for homes, cars, TVs, etc).

Look at 1996-2008: the money supply was fairly constant, hovering about $800B, but credit was getting looser and looser, increasing money velocity, and we had inflation.

So money supply alone would not cause inflation.

[jeeman]

Money supply + credit = inflation.

Credit has been dialed back big time in the last couple of years, and demand has dropped due to that (for homes, cars, TVs, etc).

Look at 1996-2008: the money supply was fairly constant, hovering about $800B, but credit was getting looser and looser, increasing money velocity, and we had inflation.

So money supply alone would not cause inflation.

[jeeman]

Money supply + credit = inflation.

Credit has been dialed back big time in the last couple of years, and demand has dropped due to that (for homes, cars, TVs, etc).

Look at 1996-2008: the money supply was fairly constant, hovering about $800B, but credit was getting looser and looser, increasing money velocity, and we had inflation.

So money supply alone would not cause inflation.

[jeeman]

Money supply + credit = inflation.

Credit has been dialed back big time in the last couple of years, and demand has dropped due to that (for homes, cars, TVs, etc).

Look at 1996-2008: the money supply was fairly constant, hovering about $800B, but credit was getting looser and looser, increasing money velocity, and we had inflation.

So money supply alone would not cause inflation.

[Rich Toscano]

[quote=jeeman]Money supply + credit = inflation.
[/quote]

No. You cannot sum money and credit; they are two entirely different things. I’ve been over this many times… see the “Credit Deflation” part of this article: http://www.voiceofsandiego.org/toscano/article_8029a8dd-60eb-530f-8f60-25b75ea31527.html

[quote=jeeman]Look at 1996-2008: the money supply was fairly constant, hovering about $800B, but credit was getting looser and looser, increasing money velocity, and we had inflation.
[/quote]

Money supply was NOT constant from 1996-2008. See this graph:

http://research.stlouisfed.org/fred2/graph/?chart_type=line&s%5B1%5D%5Bid%5D=M2&s%5B1%5D%5Brange%5D=5yrs

Broad money supply more than doubled over that period.

[Rich Toscano]

[quote=jeeman]Money supply + credit = inflation.
[/quote]

No. You cannot sum money and credit; they are two entirely different things. I’ve been over this many times… see the “Credit Deflation” part of this article: http://www.voiceofsandiego.org/toscano/article_8029a8dd-60eb-530f-8f60-25b75ea31527.html

[quote=jeeman]Look at 1996-2008: the money supply was fairly constant, hovering about $800B, but credit was getting looser and looser, increasing money velocity, and we had inflation.
[/quote]

Money supply was NOT constant from 1996-2008. See this graph:

http://research.stlouisfed.org/fred2/graph/?chart_type=line&s%5B1%5D%5Bid%5D=M2&s%5B1%5D%5Brange%5D=5yrs

Broad money supply more than doubled over that period.

[Rich Toscano]

[quote=jeeman]Money supply + credit = inflation.
[/quote]

No. You cannot sum money and credit; they are two entirely different things. I’ve been over this many times… see the “Credit Deflation” part of this article: http://www.voiceofsandiego.org/toscano/article_8029a8dd-60eb-530f-8f60-25b75ea31527.html

[quote=jeeman]Look at 1996-2008: the money supply was fairly constant, hovering about $800B, but credit was getting looser and looser, increasing money velocity, and we had inflation.
[/quote]

Money supply was NOT constant from 1996-2008. See this graph:

http://research.stlouisfed.org/fred2/graph/?chart_type=line&s%5B1%5D%5Bid%5D=M2&s%5B1%5D%5Brange%5D=5yrs

Broad money supply more than doubled over that period.

[Rich Toscano]

[quote=jeeman]Money supply + credit = inflation.
[/quote]

No. You cannot sum money and credit; they are two entirely different things. I’ve been over this many times… see the “Credit Deflation” part of this article: http://www.voiceofsandiego.org/toscano/article_8029a8dd-60eb-530f-8f60-25b75ea31527.html

[quote=jeeman]Look at 1996-2008: the money supply was fairly constant, hovering about $800B, but credit was getting looser and looser, increasing money velocity, and we had inflation.
[/quote]

Money supply was NOT constant from 1996-2008. See this graph:

http://research.stlouisfed.org/fred2/graph/?chart_type=line&s%5B1%5D%5Bid%5D=M2&s%5B1%5D%5Brange%5D=5yrs

Broad money supply more than doubled over that period.

[Author]

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