CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Friday, February 06, 2009
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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4 Comments:
Hyperinflation? Dollar devaluation?
My god, the CPI swaps are predicting deflation over the next 5 years, we are in danger of falling into a deflationary trap and you are STILL talking about inflation.
There is NO risk of inflation. None. In fact, if a risk of high inflation ever comes back that would be a great sign for the economy and mean that the economy had recovered.
I love it.
To Machiavelli999:
M*V = P*Q
Money supply times velocity equals price times quantity of goods.
Currently, there are fears that velocity is down because people are afraid to spend and banks are afraid to lend. To get Q rolling, we have been throwing money at the banks, thereby expanding the money supply. What happens when velocity picks up again, and the banks are rife with Fed-induced capital?
P will explode to make up for the "too much cash chasing too few goods" issue.
Too bad I didn't see this post before.
You are right Richard. But my question is when on earth do you expect V to pick up enough to get P going up astronomically. If anything V is continuing to decrease.
Second of all, just like we have the power to increase M, we also have the power to decrease it as well.
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