| | Fred,
I agree with all the points you made in post #95. My post was only about a small nuance regarding timing of the fiat money's effect on the value of the dollar. I particularly agree that the stock market is up high just due to injected new money, and that the general depressive effects of ObamaCare, increased taxes, and increased regulation are keeping inflation from roaring the way it otherwise would. We are like a body with meth amphetamines being injected in one arm and some massive depressant in the other - both tearing at our health, and each masking the effects of the other.
Inflation = increase in money supply. Yes, that's the basis, the cause, but there are other effects on prices and to talk about 'inflation' without mentioning prices and increased money supply and things that offset or inhibit price increases leaves a person with only a partial picture.
Along with the supply of money, I always look at the demand for money. It is purely psychological and maybe that's why its so often ignored. People hold onto their money rather than investing, expanding businesses, or increasing their rate of consumption when they feel uncertain about the future. When the demand for money runs high, that decrease of velocity in the economy can mask inflation, just as low employment makes for a sluggish economy (and increases the overall demand for money).
I'd say that the funny money IS showing up as new business expansion, but at a very, very low rate of expansion relative to the total dollars being injected. And, as you point out, very little of that business involves real production, production that makes economic sense.
------------------ The left wing attack on our universities.. that which spewed out the Krugmans, the Sunsteins, the Clintons, the Obamas... was totally effective in bringing down America. This beast is dead. Theoretically it could be turned around. It shouldn't be too late. But I too am pessimistic - and for the same reason - the generations turned out by the left wing universities. I don't think we will see a return of liberty and a strong, bustling free enterprise... not in our lifetimes.
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And, yes, the boat is floating. I'm nearing the end of the long list of things needed to convert it from a coastal sailing, week-end kind of boat into a deep water, go anywhere kind of cruiser. Then I'm out of here within a couple of months. Los Angeles to the Sea of Cortez for the winter, then off to the South Pacific.
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