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Why there's no inflation
A lesson for Mugambo? Alan Conway 09/20/04
To have deflation you need to use market money not legal ten... Vangel Vesovski 09/24/04
Market Money & Legal Tender Finster 09/24/04
Market money does not need forced tender laws to ensure its ... Vangel Vesovski 09/24/04
So Repeal Them Finster 09/25/04
Sorry, but the forced tender laws are to the benefit of gove... Vangel Vesovski 09/25/04
While ultimately a fiat based currency or 'money' vitually g... EHtaga 09/24/04
GM now offering 6 years no interest loans. Can't afford heal... Kali 09/24/04
Gotta run but here my thought quick.... Matthew Newhall 09/24/04
Just because the price of computers fell in the 1980s did no... Vangel Vesovski 09/24/04
American automotive incentives reflect price pressure from t... Kali 09/24/04
Since our money is being debased we are seeing a great deal ... Vangel Vesovski 09/25/04
More Possible Candidates Finster 09/25/04
Not yet... Vangel Vesovski 09/25/04
Leads to make you buy, still overpriced and much too high. Lucius Foster 09/24/04
And still the only thing keeping them alive is their financi... Kali 09/24/04

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Date: September 20, 2004 06:44 PM
Author: Alan Conway
Subject: A lesson for Mugambo?

I just read the Mugambo's ramblings on inflation. I thnk I followed it at the start - the Fed lowers interest rates and pumps money all over the world. Consumers consume. Commodity prices and houses go up. Then so should jobs and wages etc, but they aren't.

Maybe that is because of the Basic Business Plan of every company in the western world - produce goods at Chinese or Indian labor costs and sell them at US/European etc prices. That way you keep total costs down and profits up.

Inflation in commodities and deflation in labor costs means benign inflation.

Of course, if this is true, the real trouble will come when the Western Consumers that we are all relying on to keep spending their future income will one day realise that they can't keep it up. It won't matter how low interest rates are or how much money the Fed prints, their Marginal Utility for Credit will be zero, or maybe even negative if they don't have a job.

When that happens stop worrying about inflation. Deflation will be something we will all be screaming about.

(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=188513)