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To: austrianecon
It's only when it begins to circulate that money causes inflation. Make sense?

This, of course, is true by definition. However, I question whether there will truly be an absence of borrowers or an absence of commercial bank money creators. It appears like this may have happened in the 1930s, but my sense is that the collapse in the 30's had more to do with the massive bankruptcies and international defaults than conscious decisions to cut back on new borrowing and/or lending. With regard to the Fed cranking out dollars left and right during the 90s, those dollars were used, primarily, to create asset bubbles rather than inflationary consumer prices. But I do take your point that the increased productivity engender by the technology boom tempered price inflation. We are basically in agreement.

34 posted on 12/10/2002 9:19:27 AM PST by Deuce
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To: Deuce
Yeah I think we do. I also agree with your reference to the asset bubbles. Really what I was trying to convey was the idea that sometimes the play of market forces trump those of the Fed. I think we also agree that we'd be far better off without a monopoly money producer?
41 posted on 12/10/2002 10:06:24 AM PST by austrianecon
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