Thomas J. Gordon

Dispelling the Deflation Myth

Living4Dividends: These guys argue that money supply or what they call "hot money" funnels itself into certain asset areas. I respect these guys but I'm not sure I understand or agree totally with what they are saying:

www2.nationalreview.co...

Dispelling the Deflation Myth

I'm not sure if this article is trying to make a distinction between asset inflation/deflation and general cpi inflation/deflation. You read things like "greenspan increased the money supply and that money caused oil to skyrocket". I don't believe excess money supply chanels itself into specific areas. To me, inflation is a general phenomenon. You have certain amount of money chasing a certain amount of goods and that indicates a price level. Asset bubbles may happen in commodities, real estate, or stocks. In my mind that is a very different phenomenon than general cpi inflation/deflation.