Tuesday, 27 November 2012

Pump it up

News this morning that the local stock market is at a five-year high.

News has been everywhere for at least the last year that housing prices are running rampant again.

And all this in an economy as flat as a morning after the night before.

Don’t you think it’s inevitable that pumping the money supply at the rate of 5 to16.55% per year will see it increasingly slop over into share and housing markets?

Don’t you think that as long as we do have a Reserve Bank meddling with the money supply, that perhaps it’s time share and house prices were included in the Consumer Price Index, against which the Reserve Bank’s performance is measured?

And don’t you think more folk should realise that GDP—that so called measure of “production”—is really only a measure of how much money changes hands, and the more you pump up the money supply the more this figure is being massaged?

Or to use a more appropriate word, faked?

Don’t you?

Here’s Elvis Costello:



  1. the drunken watchman27 Nov 2012, 13:17:00

    last I heard, it was all going to collapse, along with the Euro and Greece and everthing else.

    So the alternative to collapse is rampancy?

    oh well .....

  2. Of course Russel Norman should be cheering this, because this is exactly what his prescription would create.

  3. Rampancy is in. The systems need an enema; what they're getting is more of the toxins that caused the first collapse.

    The alternative to the next collapse and a genuine purging of the system is either stagnation of stagflation--either decades of stagnation, like Japan has enjoyed in an effort to fake her reality, or a decade or more of stagflation, like we all enjoyed in the seventies after two decades of the whole world faking economic reality.

  4. the drunken watchman28 Nov 2012, 12:19:00

    presumably stagntion or stagflation does not include a rampant stock market?

    so.... when does the stagflation or stagnation start?

    or did everyone just get bored with waiting for it?


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