Will There be Worldwide Inflation Without Growth?

It is interesting to watch the expectations of those riding off the recent boom in house prices in the US and the UK. In both countries, there has been an enormous amount of captial put into the creation and revamping of property. If the amount of such investment is excessive what results is a downswing of activity until demand picks up to bring overall demand for prperty in line with long term needs. Whether these needs may be somewhat higher than in the past is an interesting question.

Needs are an essential ingredient to the equations that bring about a balance in supply and demand. If policy makers wish to reduce the potential for inflation they can do this by actions that influence either demand or supply, or both. Watch for US policy makers desperately try to get Americans to save more and thereby reduce their debt. The policy of lower interest rates did not reduce debt, but made the debt situation over the longer term much worse than it was. However, by increasing the supply of new properties, the policies enable the authorities to dig a hole for themselves in terms of their range of choices in the future. It will not be possible to lower interest rates to spur real demand for houses. The effect will unfortunately be to lower the exchange rate and to push the economy towards inflation without growth. What do you think the economy has been experiencing for the last thirty years!?

Investment for the Social Gain or Investment for the Personal Gain

When I pause to think about stock market investment, it doesn't surprise me that so many people make money and so many people lose money. What one tend to forget is the motivation behind investment and how that defines your strategy and possibly the overall outcome of your investments.

Normally, investment managers ask whether you are investing for the long haul or for the short term return. Doing a turn with your money is basically short term investment. When you do short term investment, you look a very different things from the long term. if an investment or mutuals fund is doing your investments for you, the issues are not so very different.

The first thing that you are struck by is the fantastic array of possibilities for investment. There are a huge number of alternatives. There are so many that it is overwhelming to the new comer. You need to be reminded that people spend their whole lives investing in the stock market and that it is exceedingly deep and exceedingly complex. Your immediate thought is that this is so difficult that I would be rather short sighted if I weree to try to do the investment myself. You figure that you would be pretty hopeless at working through all the maze of opportunities for gain and for loss.

The thing about investing in stocks and shares is that it is a wonderful place in which to lose your shirt, or at least, your money to someone who is not transparent, hides a lot and wants to do personal stuff that you would rather not hear about. Why does the world of investments have to be so tricky you ask yourself? These people I have to deal with seem worse than second hand car sales people! Indeed, almost all stock markets have a million stories to tell of how people were targeted by those who know more angles than an unethical flim flam artist. So why invest? Or what else can you do to keep the real value of your savings growing?

What you will find is that you do not have enough time to make a wise investment. You will be arded by a host of individuals who say they will be honest with you and simplfy the process of investment. They will have deals that vary from do it yourself to let them do it for you. Whether you win or lose is largely a combination of luck and savvy. The savvy comes from learning by doing, and it will not be easy.

In your very first attempts at stock market investment think very hard about whether you are in it so that others can make money or so that you can make money. If you want to make money then you will need to consider whether this is by ethical means or unethical, by taking risks or by thinking about where your money is going. Are you putting your money into something that you believe in because you can examine the asset for yourself or not. You need to veruify your motives and your willingness to be committed. You need to study one industry thoroughly and understand it for what it contributes to the economy. By focusing on one industry you will learn a lot about what it takes to invest wisely.

The Terrible Economic Policies of the Bush Years

I will be brief!

The economic policies of the Bush administration in the United States have been an unmitigated disaster.

Read the Wall Street Journal and you can see how monstrous the present problems are. There is a terrible cost to be born by some people, and it is my guess it will be the middle class of America, and those least able to come to terms with an economy that has moved so far away from where it should be.

What a mess!

Why Governments Really Do Need to be Vigilent About Inflation

I just hope that people do not like to be taken for fools. The thinking economist is somewhat disappointed that governments and central banks think that they can disguise inflation through the publication of misleading inflation statistics that leave out key sectors such as rising housing and energy prices.

Have the managers of your economic future lost their ability to think? Or are they deliberately misleading you in a dangerous game of monopoly promoted by people who know only to well what strings to pull and what economic forces to unleash. That is to their benefit and to the greater mal-distribution of incomes within your own economy. Think about it? Are you treated fairly as regards the housing and energy inflation?

This game of monopoly economics that governments are presently playing is highly dangerous and could result in your early demise. Don't think that you are immune to the social consequences of a bad economic game. You will lose as much as others will gain. If you think that you are a winner, either you have strings to pull, or you are fooled by randomness that will get you in the end.

What I am saying is that we all can lose as long as this mad game of using the housing market for personal political gain within your community continues.

Economists are Playing with a Force of Social Fire They Do not Understand

This is not something that the thinking economist realizes because the thinking economist has read history and understands the forces that precede wars. Look at how dangerous the situation in the Middle East presently is. Do you think land values are not at the root of the problems there. If the local governments want to push people into war they do it through the policies of their central banks, who forget that they are there to serve the whole people and not just the financial sectors who engage in the monopolizing of property.

In a world in which governments should be in power to support the interests of the whole of their whole constituencies and not just a portion, the strategy of central banks and their committees, or government cabinets or secretariats of economic authorities for allowing inflation in housing sectors of economies is socially destructive.

House prices as Measures of Inflation and Mal distribution of Incomes

It should really annoy you that in an election year in the United States, one of the richest entrepreneurs of that country proposes to anyone who listens to him that the fastest way to become rich is through property inflation and management. What he is describing is a socially destructive process that leads to or perpetuates what economists refer to as the Pareto distribution.

Yes, the father of fascist economic thought had it right, when he said that the distribution of income within all economies is socially destructive and harshly skewed. Now Pareto saw that a free economy tended to be unfair, especially in the distribution of incomes and wealth through property. Its obvious that the largest chunks of property are houses that people struggle day in day out to have and maintain.

What really gets a family is when the economic management is their community is so poor that it forces rises in prices to occur over a very short period rather than the long run. Seeing people in Cleveland deprived of their homes is heart wrenching. Do you watch what was going on in your community?

This compression of house price rises into a short time frame is what led to the socially destructive forces of the second world war that followed after the German inflation. Have economists not learned anything yet? Perhaps, the field needs to start training its students to think for themselves rather than absorb the garbage of theory that has no historical content. Do young economists not read history?


Monopoly Capitalism Through Property Ownership

Dah! Has anyone played monopoly recently? Don't you realize how socially divisive the game of monopoly really is? Have you not fought with your fiends and family after a game of monopoly.

The means of Controlling Inflation in Housing Sectors

It was the right wing economist Milton Friedman, the winner of the Swedish Central Bank's Nobel Prize, who proposed that the money supply should not grow by more than 2 percent per annum. Whatever his politics, Friedman was on the right track. The problem is that political economy, the social sciences and the instruments of economic management are not good bedfellows.