Summary

AAS argues that economic growth cycles and inflation are always and everywhere a product of the expansion and contraction of the rate of growth of the money supply. Calculating money supply is crucial in predicting those economic market variables. Changes in the money supply do not reach all actors in the economy at the same time. AAS believes that certain actors receive that newly created money ahead of or behind others, which importantly creates lags, fluctuations in the money supply growth rate and subsequent fluctuations in output prices and market activity. By measuring the money supply correctly and calculating the historical lags between the changes in adjusted money supply and changes in the target variables, AAS can correctly predict growth, inflation, and asset prices. AAS has produced several comparisons between their proven money supply model and target variables.

They argue that the pool of money is under pressure, which means we may be heading for serious troubles ahead. AAS suggest that by raising interest rates, this will undermine money printing and there could be problem with banks. Banks could reduce their lending out of thin air or ‘fractional reserve lending’ and this will influence money supply growth. AAS believe that a lot of the asset bubbles will come under pressure. We’ve had loose monetary policy for quite some time and reckless fiscal policy as if we have unlimited resources, implying we must fund the growth. But the economy hasn’t got the means, so the government will print money and the government will borrow from the FED and create ‘helicopter money’. The central bank decided to be smarter than the market, saying ‘we know what’s good for you’ and this creates discrepancies where the government creates infrastructure for the future which the consumers never asked for. When the future arrives, we’ll create goods and services that are not going to be profitable, and a disaster emerges.

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