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House Price Crash Forum


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About ralavelle

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  1. Inflation is a measure of the net decrease of purchasing power resulting from an increased rate of monetary emission that is not correlated to an increase in economic productivity. Hence, it is a direct result of the usurious policies of the independent central banking system itself. The current housing and other asset price bubbles came into being due to the "wall of money", low interest rate, liquidity pumping exercise conducted by the US Fed in response to the 1998 LTCM crisis. As such, there is no cure for such recessionary cycles without recourse to a fundamental change in economic and monetary policy, hinging on government regulation of the money supply to ensure that monetary emission expands in line with increasing productivity.
  2. The primary reason for the surging oil price is NOT repeat NOT supply/demand dynamics. There is more than enough oil supply to meet global demand. The real price driver is speculation by hedge funds, driven by geopolitical instability. The US govt makes up statistics on their reserves to suit the speculative conditions that prevail at any given time, to hide the nature of the MASSIVE profit gouging that is going on by the greedy fund managers and their ultra rich clients.
  3. The reason that price disparities exist between national economies is a function of the state of basic economic infrastructure in the country concerned (in direct contravention of "free market" theory and the rest of the monetarist hogwash masquerading as economics these days). In India, labor is cheap because there are no unions, healthcare, minimum wages and other restrictive regulatory laws to impede the cost of doing business. In physical productive terms, producing goods in 3rd world countries is cheaper because the cost of building the economic infrastructure that was required to develop the component technology in the first place is not factored into the price. By setting prices according to "free market" ideology, the global economy as a whole will tend to operate at below break even levels, with increasing disinvestment in essential basic infrastructure required to introduce net gains in economic product in the long term. Corporations make short term monetary profits, but the global economy spirals into a long term physical economic collapse. Properly considered, profit should be a metric of gain in productivity rather than an increase in monetary primitive accumulation. Hence, valuation of national currencies becomes the relative measure of net physical productive output over monetary input. i.e. An increasing currency is one that is growing in terms of physical productivity.
  4. My take is that the market is signalling very stormy waters ahead. A large influx of global capital into "safe haven" investments, such as long dated govt bonds is indicative of the turmoil in credit markets, collapsing hedge funds and other derivatives crises. It is impossible to predict what will happen next, but a disorderly collapse of the USD is possible unless concerted action is taken by governments around the world to stabilize the system. This is admitted (in the usual opaque language) in the latest BIS report : http://www.bis.org/publ/ar2005e.htm
  5. Independent central banking systems in general are aspects of the so-called European systems of liberal parliamentary democracy. The central bank is in fact a private "for-profit" institution operating on a charter arrangment or by other international treaty law. In the liberal system, the central bank controls the only source of credit for the host economy, "lending" fiat money created out of thin air to the government at self determined rates of interest. Clearly, in such an arrangement, the notion of democracy is somewhat illusory. In fact, in times of acute monetary-financial crisis (such as the current, global systemic breakdown crisis), the central bank asserts a higher degree of authority than the national government upon which it is a parasite. This leads directly to the phenomenon of fascist dictatorships in Europe over the last century, whereby private financial interests run coups against recalcitrant governments to prevent them from adopting economic policy measures in defense of the general welfare, as against the authority of the central bank. The only way out of our current global crisis is a return to the American system economic model adopted by FDR, whereby, the government issues state credit backed by national banking institutions for the purpose of long term capial formation for development of essential basic economic infrastructure, such as power, transportation, education and healthcare. In a functioning economy, government regulation ensures at least 50% of national economic product is reinvested in basic economic infrastructure, to ensure a net increase of productivity for current and future generations required to operate the economy as a whole above breakeven levels. The original US system is the mortal enemy of the private financier elite, having been the cause of the American revolution and the ongoing battle between Republican and Oligarchical forces within European civilization globally.
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