Perpetual Inflation: The Stealth Source of Our Economic Problems

Monday, May 23, 2011
By Paul Martin
May 22nd, 2011

The financial crisis and “recession” since 2007 have led to much discussion and speculation about the nature of and causes of our economic woes. There are literally dozens of books on the economic crisis (called, variously, the “subprime crisis”, the “housing crisis”, the “credit crisis”, etc). While each perspective has its own unique “narrative” on the crisis, the dominant themes typically proffered are:

•An “epidemic of greed” by the big banks
•Regulatory failure (of the big banks and other financial institutions)
•Regulatory “capture” by the banking interests
•”Easy money policy” by the Greenspan Fed in the wake of the 2000/2001 market crash and recession
•An epidemic of mortgage fraud and greed by the homebuying public
•CRA, loose lending policies and poor underwriting by the GSEs (Fannie and Freddie) and HUD/FHA

Of course all of these are to some significant extent true, and they aren’t mutually-exclusive (though folks who advance one or more in their own narrative of the economic crisis tend to disproportionately prefer their chosen explanations and reject most of the others). But the most serious flaw in an analysis based on any one or subset or even ALL of these “explanations” is the failure to correctly see them as the outcome of a single fundamental factor: the Federal Reserve and its permanent and perpetual policy of inflation.

The Rest…HERE

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