Is this what blinds him to the monetary inflation caused by a cheap dollar?
The reduction of such monetary inflation generally results in a slowdown and the temptation to reflate.
Will private banks lever up, at least enough to keep the monetary inflation party in flight?
FORBES: Monetary Watch June 2011, Inflation prospects post QE II
Such will of course be supportive of high rates of monetary inflation yet again in April.
FORBES: Contrarian Take Databank, updates plus thoughts on the Euro USD Cross
What about a precipitous fall in the rate of monetary inflation negating this thesis?
The latest TMS2 reading showed monetary inflation growing at an accelerating 11.2% year-over-year rate.
When the Federal Reserve encourages monetary inflation via credit expansion, banks artificially lower interest rates.
FORBES: Since Monetary Spending Is Unequal, Who Spends Wisest?
As brilliantly explained by the Austrians (see here), monetary inflation distorts interest rate and price signals.
This begs the question, is the US monetary inflation rate beginning to decelerate?
The net net here is that we think the prospects for monetary inflation in the Eurozone are suspect indeed.
Add in an increasingly cumbersome regulatory regime and such is not an environment conducive to wide-scale bank-initiated monetary inflation.
Yes, not as large as the one that gave us the Great Recession, but one heck of a monetary inflation.
FORBES: Monetary Watch June 2011, Inflation prospects post QE II
The few who address it, misunderstand it, holding that monetary inflation is good for growth and therefore good for stocks.
Still a relatively robust rate of monetary inflation, but for how long?
And that means a return to much higher rates of monetary inflation.
FORBES: Monetary Watch November 2010: Bernanke not the only one printing money
In the 53rd month of the housing boom-bust cycle the year-over-year rate of monetary inflation was a smallish and quickly decelerating 5.3%.
The financial and economic meltdown of 2008 was preceded by large increases in government spending and monetary inflation that artificially lowered interest rates.
FORBES: Since Monetary Spending Is Unequal, Who Spends Wisest?
As we have noted on numerous occasions, all monetary inflations eventually end in economic busts, the larger the monetary inflation the larger the bust.
Neither government spending nor monetary inflation results in more production of more goods that are able to satisfy the subjective ends of people in our social economy.
And if private banks continue their money printing ways, instead of a precipitous fall in the rate of monetary inflation we could be looking at a precipitous rise.
While not a gang buster rate of monetary inflation, certainly nothing like we are seeing in the US, it is notable in that the Euro money supply was flirting with monetary deflation mid-2011.
The immediate exhilaration of monetary inflation offers cover.
FORBES: Not Just Another Article Espousing The Gold Standard
This monetary inflation quickly pushed up oil prices.
FORBES: Hello More Stringent CAFE Standards, Goodbye Lincoln
Monetary inflation is no better at fostering prosperity.
FORBES: Since Monetary Spending Is Unequal, Who Spends Wisest?
But will the Fed's tactics of fighting deflation (which is intrinsically a good thing for creditors) through monetary inflation ignite a virulent new strain of inflation (which kills bond returns and drives down their prices)?
The fact is, given the size of this our current monetary largesse, any substantive deceleration in the rate of monetary inflation from here ushers in the real possibility of another financial and economic bust, and a monumental one at that.
But given the size of those reserves, and the banks overwhelming need for income, it might not take much in the way of interest rate spread expansion to get some monetary inflation of the double digit variety from these banks.
FORBES: Monetary Watch June 2011, Inflation prospects post QE II
Euro zone money supply as measured by TMS is currently showing a year over year rate of increase of 6.3%, not as high as in the U.S., and clearly down from recent double digit highs, but still a healthy rate of monetary inflation.
FORBES: Monetary Watch November 2010: Bernanke not the only one printing money
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