FCmagic01:
I’m not saying that credit has no effect on prices and neither is the author of that article. What I’m saying is that credit and money should be separated because they effect things differently. I believe credit has weaker and temporary effect on prices where money has a permanent and more powerful effect.
Suppose M2 (which is a combination of money and credit) went from 5 trillion to 10 trillion. I would want to know whether that was because of credit expansion or money expansion. If it was due to credit expansion I would expect prices to rise some and then fall later as credit inevitably contracts. If it was due to money printing I would expect prices to double permanently.
Do you think we are heading for rising or falling prices?