So the question becomes....will dilution show up as inflation ? Inflation/deflation are dependent on the velocity of available currency to price goods and services..... Thus far....money has been given to banks who lost their money via Adam Smith's invisible hand....with regards to side by side real estate comparables.....marked to market .....incredibly overlevered relative positions.... So in one sense.....money is being replaced that was lost..... Now the question becomes one of availability.... However in the US Economy....and any fiat money economy...it was indeed Adam Smith invisible hand losses that created the winners and losers.... An economy is about winners and losers....the idea being one struggles continually to a better and more efficient place.....whereas increased productivity is the result...
I imagine we will all wait into '09 to see the outcome of the almighty struggle and even then it will probably seem odd to us. regards f9