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Some Words From Bill Bonner

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Meanwhile, on the money front, we return to George Gilder's preposterous notion that record debt levels don't matter – because our houses are worth more. It is true that debt would be no problem if history really had stopped. But, the trouble with debt is that it can't stand adversity.

The Economist published the following figures for money supply growth in various countries over the last 12 months: Australia +9.1%, Britain +11.7%, Canada +7.7%, Denmark +14.7%, U.S. +8.1%, the Euro area +7.3%.

Everywhere you look, the money supply is going up twice or three times as fast as GDP. Where does all this money go? Liquidity, like rainwater, has got to go somewhere. What has been going up two to three times faster than GDP? House prices! In other words, the supposed extra "wealth" that Americans enjoy is not real wealth at all. It's just inflated asset prices. Too bad monetary officials didn't inflate at 20% per year, or 100%. Perhaps they might have taken a page from the Argentines in the '80s or the Weimar central bankers of the '20s; they might have just recalled all existing dollars and added three or four more zeros. Think how rich we'd be then!


In economics, inflation is a change in some important measure of money which says either real or apparent value is falling. The three most obvious versions of this, each held by some economists to be "real" inflation, are for prices to rise compared to the currency in question, the overall value of that money to fall (perhaps compared to other currency), or for more of that money to be added to the economy.

More specific examples:

* If the cost of goods and services are getting higher

* If the money is worth less, compared to foreign money

* If the government increases the money supply, other than just to replace old money it destroys

wikipedia: Inflation

Inflation 2% ??????

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wikipedia: Inflation

Inflation 2% ??????

Thanks. Good stuff.

Off of the main topic, but I also liked this bit.... a reference to the VI nature of the media:

When you read the newspaper, for example, you are not reading "what really happened." You are seeing what happened as interpreted by a particular class of people, with a particular background, and a particular dog in the race. Practically every headline and every editorial reflects the unconscious bias of the existing institution and its supporters.
Edited by non-FTBer

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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