those who believe in mv=pq should stop focussing so much on the m, and start looking at the v.
Tom,What happens if V recovers?Alice
You can have all the equations you want, but its the money supply you watch. People will always need to buy stuff therefore there will be a bottom on V. This is what always happens to high inflation. V drops off a cliff, looking like deflation while M increases. This is what happened in Zimbabwe and Weimar Germany (for two extreme example).It becomes very hard to reduce M when inflation picks up, as the demand for money has increased, thus resulting in a secondary depression which would be worse then the first one.
What's interesting is that we've initiated the Weimar solution (fascism) prior to the Weimar conditions. Our Peronist president will have lots of fun once the real trouble - inflation, high interest rates and high unemployment - starts.If he muscled in on auto companies and banks before this happened, imagine what he'll do afterwards.
Nice vide. I think this other utube video by the same author is also very good:http://www.youtube.com/watch?v=U-tI-Wv1wko&eurl=http%3A%2F%2Fukhousebubble%2Eblogspot%2Ecom%2F&feature=player_embeddedIt explains how from a gold point of view we are all losing money.
Post a Comment