Monday, August 8, 2011

Monday Post #1: On the topic of Printing Presses

The pure definition of inflation is "an increase in the money supply".

Excessive expansion of the money supply leads to loss of confidence. That's why Yu Yongding, a former member of the Monetary Policy committee of the Chinese Central Bank, said yesterday that the situation:
  • "is ultimately unsustainable. The longer it continues, the more violent and destructive the final adjustment will be.... The danger for China is that it does not learn the right lesson - namely, that now is the time to end its dependency on the US dollar."
Greenspan has made it clear what the United States intends to do.

How long before China accepts what it must do?

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