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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: Maurice Winn who wrote (4407)6/7/2001 10:39:01 AM
From: pater tenebrarum  Read Replies (3) of 74559
 
you err in one not insignificant point. all an additionally printed dollar does is debase the value of all remaining outstanding dollars. no value is created, it's just a piece of paper. what it DOES do, is punish all savers. so even though it is a form of back-door taxation, it does NOT confer a social benefit.

i agree with you that a rise in productivity should normally result in price deflation, were it not for the excessive money printing. now THAT would be beneficial, since we could all afford to buy more goods and services as a result. this potential benefit is taken away by the money printing.

likewise, the increase in stock prices is offset by the decreasing value of the currency, and thus is largely smoke and mirrors. adjusted for price inflation, the return on equity investments is paltry. adjusted for the growth in the broad monetary aggregates since Greenspan helms the Fed it is actually negative.
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