Inflation has nothing to do with the money supply? Well, then, I bet the sun has NOTHING to do with global warming!

Inflation is DEFINED as an expansion of the money supply. Take your Keynesian/collectivist “economics” elsewhere.

The supply and demand for goods and services factor into inflation, but the supply and demand for money are also part of the equation.

The money sitting at the banks is like a sleeeping lion. It was put there to re-stimulate the economy. It will not sit there forever. The government will take it and spend it if the private sector doesn’t. Either way, it will be lent, spent and serve to increase the money supply.

More money and less goods (due to a sputtering economy) equals rising prices.

Unlike the mainstream media, Mogambo is telling you what to buy before its overbought and too expensive.

The Fed and the government work very hard to make people comfortable with inflation.
This obviates the self-fulling run on hard asets. It has worked well for a long time, but what happens when we have rising prices and recession? Impossible? Not theoretically (as Keynes promised) or empirically (1970’s).

What will they do when we have both yet again?
In theory, they can stop inflating if they choose(like Volcker), but at what cost? Obviously not a cost they have been willing to bear thus far.

2- DELEVERAGING which begain at the end of last summer still isn’t done. Toxic assets still need to be removed and bad loans still need to be written off. Furthermore, indivudals are now beginning to reduce credit card and other debt while increasing savings.

3- TRADE SLOW domestically and internationally.. until this picks up there won’t be the increase in Demand that will spark the unholy inflation to come

4- UNEMPLOYMENT needs to stabilize and begin to recover. If you have no job you won’t spend. You’ll even, after enough time, opt for a lower paying job just to get by. This will keep inflation in check at least for a while but once it’s out of its cage you will see wages lagging far below the inflation… yikes!

The FED is increasing the money supply, but the money is just going into banks to cover their loan losses. It’s not circulating.

The FED is buying the banks toxic assets and once things recover, they plan to sell them back. If this works out (I doubt it will), it won’t be inflationary. The money will move from FED vaults to bank vaults back to FED vaults.

Mogambu fails to recognize that inflation is entirely caused by supply and demand, not by the money supply. Right now, demand for everything is falling off a cliff, so prices won’t go up. If banks resume their loose lending practices and money goes back into consumers pockets, this may increase demand, but I just don’t see it happening any time soon.

The time to hold gold, oil, silver, etc… is when the employment picture is improving, not when it’s getting worse.

Mr King: Do you know what a Keynesian is? Do you still attribute economic policy to politicians? Sophomoric.

As for anyone with a brain: Whiskey, gold, silver, cigarettes. Where you can see it!!!

There’s not a dime’s worth of difference between D’s and R’s or cons or libs.

Keep in mind the most important and also most salient fact: The success of any fiat system relies on the CONfidence of the participants. Get it? I didn’t think so.

Side note: Hey, King, shut up. Leave my Mogambo alone. You are dismissed.