How can gov't justify raising the MW by 40+% when they state raising the fixed income for many seniors by 1.7% for those that receive only SS benefits is enough.. Keep in mind that the average monthly SS benefit is only $1,100/month. This means a lot of the elderly receive much less than the average. To me this is a very unjust gov't. BO says he is fair. Baloney. JMO Shame, shame and shame..
Yes we get sloppy with the terms tapping out comments on a message board, but from context we get the drift.
The 20% growth was an arbitrary exaggerated number to illustrate the point. The specific point being it would create a deflationary situation. You make my broader point, it's tough for an economy to grow when it's restricted by the limitations of a gold standard.
As I stated, I am I referring to the term "inflation" from the pure monetary perspective. I do realize people use the same word for "price inflation". You might like On the Origin and Evolution of the Word "Inflation" by Michael Bryan.
I would be interested in hearing your explanation of how an economy would grow by 20% while the money supply grows by only 5%.
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"Any increase in money supply is inflation".
Any increase in money supply does NOT result in inflation. The proof of that is evident by the fact that without changing money supply at all under a fixed gold standard overtime as the economy grows deflation has historically reared its ugly head. The money supply wasn't changed or decreased anyway, how could there be deflation.
Whether the economy or the currency experiences deflation or inflation is a function of at least 2 things. Money supply and economic growth. Or more precisely the change in money supply relative to the change in economic activity.
If the economy grows by 20% and the money supply grows by 5%, there won't be inflation. The demand for the currency needed to trade will go up which will make it more valuable which means you can buy more things with it which means prices will fall.
The opposite is more intuitive. If the economy is flooded with currency, prices rise, inflation results. Therefore, if the opposite occurs, ie money supply is reduced, then deflation must result.
In the question, if you do the math you'd see, because of the limit of the gold mined, the money supply grows much less than the economy, so there would be deflation.
Any increase in money supply is inflation because that is the very definition of inflation (from a monetary view). Economies don't experience deflation, they have what we refer to as "contraction". They may also expand (expansion) or remain relatively stable.
what do i win?
"If you check you'll fine Nixon was involved in that,..."
You mean TRICKYdick?
It's a pretty simple math problem. I've provided all the parameters and information needed to solve and answer the question quantitatively and qualitatively if you understand the economic fundamentals.
And you already said;
"That would seem to be very close to were the economy is today."
Did you.... "know what congress was going to do and all the other world powers were going to do. Example Russia, North Korea, China and few more of the G20 group.... when you made that comment?
For clarity, assume all else being held constant or equal.
I know we don't have a gold standard. If you check you'll fine Nixon was involved in that, but your question created a Gold Standard.
To be very accurate you would need to know what congress was going to do and all the other world powers were going to do. Example Russia, North Korea, China and few more of the G20 group. Its not a simple problem or every Financial analyst would be out of work.
Sum of parts is worth more than whole. Citibank is worth holding for the long term
It will be more than Christmas Rally. All the litigation of big banks should be gone by 2015. Legislatively, you can only go back 7 years, Counting from 2008 + 7 years= 2015. At which time, the remaining reserve can be released. The return of big banks will take a quantum leap. Citi has at least 7 billions reserve reflect in the -7 billions enterprise value. There will be almost 95% boost in earning. The ROE will return to the teens. Valuation will jump by the corresponding 95%. Stay tune for the best performing stock in 2015. I will hold it for the long term. .
Sentiment: Strong Buy
Similar in an almost completely dissimilar kind of way. For one, we don't have a gold standard.
B. No change,
C. Inflationary or
And as a bonus, why?