Tracy, I'm not disputing that printing money can cause one form of
inflation...it's a fact.
So, too, is too much money chasing too few goods. If both you and I want
the same limited product, then the vendor can raise the price of that
product. The inflated price is due solely to the fact that both you and
I wanted it and could afford it, not because the gov printed extra
money, or the product cost more to produce.
-----Original Message-----
From: HP-3000 Systems Discussion [mailto:[log in to unmask]] On
Behalf Of Tracy Pierce
Sent: Wednesday, January 16, 2008 4:39 PM
To: [log in to unmask]
Subject: Re: [HP3000-L] OT: Economy
.....and because you found it on the internet, it must be right! but for
starters, we all know there's no such thing as too much money.
When demand is greater than supply for any given item, prices for that
item go up, but it's very simple supply and demand, and it doesn't
involve inflation - no new money needs to be created for the price of
that item to go up or down. Of course you can get away with applying
the term "inflate" to the price of the commodity, but hey, lots of words
have lots of meanings.
Inflation applies to the act of creating more dollars without increasing
the actual wealth they represent. Each of those poof! extra dollars
automatically devalues every preexisting dollar, perfectly equally,
regardless commodities. The government that overprints is currency is
quite effectively, and quite 'fairly', stealing from everyone holding
that currency.
> -----Original Message-----
> From: HP-3000 Systems Discussion
> [mailto:[log in to unmask]] On Behalf Of Ray Shahan
> Sent: Wednesday, January 16, 2008 2:08 PM
> To: [log in to unmask]
> Subject: Re: OT: Economy
>
> DEFINE: Inflation
> A general rise in the price level of goods and services. Occurs when
> demand increases relative to supply. In other words, too much money
> chasing too few goods.
> www.acmeadvisor.com/Glossary.htm
>
>
>
> -----Original Message-----
> From: HP-3000 Systems Discussion [mailto:[log in to unmask]] On
> Behalf Of Tracy Pierce
> Sent: Wednesday, January 16, 2008 3:15 PM
> To: [log in to unmask]
> Subject: Re: [HP3000-L] OT: Economy
>
> "Too much money" chasing too few goods? That's simple supply and
> demand, not inflation.
>
> Inflation occurs when a government manufactures money with nothing to
> back it up - each dollar represents a share of wealth, and simply
> printing another dollar devalues the rest proportionately. (maybe a
> great way to tax?)
>
> The mortgage debacle was quite predictable, and people who took out
> loans on which they couldn't even pay the interest should have known
> better than to buy at insane prices.
>
>
> > -----Original Message-----
> > From: HP-3000 Systems Discussion
> > [mailto:[log in to unmask]] On Behalf Of Ray Shahan
> > Sent: Wednesday, January 16, 2008 12:02 PM
> > To: [log in to unmask]
> > Subject: Re: OT: Economy
> >
> > Craig,
> >
> > As I'm sure you know, there are many things that affect any
> > economy, but we can, at times, finger some of the large
> entities that
> > have large affects (effects) on our economy:
> >
> > As housing prices went through the roof in the last 5/10 years,
> > no one was yelling inflation - even though that's exactly
> > what it was -
> > too much money chasing too few goods. We allowed anyone and
> > everyone in
> > America to buy a home - even with no money down or proof of
> > income, and
> > this drove the price of housing through the roof!! Of
> > course, everyone
> > was ok with housing prices going up because we all then went
> > to the bank
> > to get a second mortgage on the inflated value of our home,
> and spend
> > that money on goodies that helped spur the entire world's economy.
> >
> > Now, the question is why didn't the cost of consumer goods go up
> > when we all had the artificial money to spend from our
> > inflated housing
> > prices? It's because we imported goods that were
> > manufactured overseas
> > at a cost that was so much cheaper to produce (low wages, and less
> > government mandated controls) that it allowed Wall Street to make a
> > killing, while keeping the prices of the consumer goods within easy
> > reach.
> >
> > Ok, up comes the sub-prime/credit bust in America that rocks the
> > world's credit. Now there is less money chasing the same amount of
> > consumer goods, so those goods should go down in price
> (just like the
> > housing values in America are). But the consumer goods don't
> > go down in
> > price because we have to account for the dramatic increase
> in the cost
> > of the energy used to produce and ship those goods.
> >
> > That's the view from 60,000 feet, Craig. 8-)
> >
> >
> >
> >
> >
> >
> >
> > -----Original Message-----
> > From: HP-3000 Systems Discussion [mailto:[log in to unmask]] On
> > Behalf Of Craig Lalley
> > Sent: Wednesday, January 16, 2008 12:30 PM
> > To: [log in to unmask]
> > Subject: [HP3000-L] OT: Economy
> >
> > I really don't understand the economy.
> >
> > For the past 15+ years, home prices have been spiraling out of
> > control. People are spending more than they make and the
> savings rate
> > has gone negative. All that time, inflation was low, if
> not stagnate.
> > Some people even talked about the problem of deflation.
> >
> > And now that home prices have all but collapsed, financial
> > institutions are being bailed out by foreign countries.
> Defaults on
> > mortgages are at record numbers. The ON thing stopping
> bankruptcy is
> > the recent changes in the laws.
> >
> > So now, now that everyone is cutting expenses and on a
> > budget, now that
> > the money system is tight. Sub-prime mortgages, which
> really are not
> > Sub-Prime... (check THAT one out), are setting records for default..
> > with all this happening.
> >
> > Whole Prices Soared Last Year
> > http://ap.google.com/article/ALeqM5jsanM66tszKz1zFq0LOG4XvWS7z
> > AD8U6CQQ80
> > If someone can explain this, in layman's terms preferably, I would
> > really appreciate it. (just in case it goes in this direction, I
> > already know, "It's all Bush's fault.") Please leave the
> > politics out
> > of the debate.
> >
> > -Craig
> >
> >
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> >
>
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