>>Inflation with a collapsed real estate market? I don’t think so.<<
Wanna bet? Imagine being hugely underwater in your house as your food, gas, clothing, etc. goes up in price 20% every year. And that is not inflation. Inflation is the devaluation of the currency, which is happening hugely as they print, literally and digitally, all the money they want to. Might as well use leaves for money - at least that will be the case in the next year or two.
Manipulation temporarily stopped the silver run. Expect it to return, with a vengeance. It is a bargain right now.
You can get the best of both worlds, declining housing prices in the midst of overall price inflation. ouch!
Devaluation of a currency is not a cause of inflation it is a RESULT of inflation. In true inflation the price of housing escalates as rapidly as everything else.
Food, and clothing have not gone up by 20%. Fuel price increases are not the result of monetary disturbances but the result of supply suppression due to Urkel’s anti-energy policies. Food prices are high due to another non-monetary issue, the diversion of food stocks into automobile fuel tanks.
Monetary policy changes generally takes about two years to take effect. So it many be about ready to take off but so far it has not been much of an issue.
“If,” he said tersely, “we could for a moment move on to the subject of fiscal policy ...”
“Fiscal policy!” whooped Ford Prefect, “Fiscal policy!”
The Management Consultant gave him a look that only a lungfish could have copied.
“Fiscal policy ...” he repeated, “that is what I said.”
“How can you have money,” demanded Ford, “if none of you actually produces anything? It doesn’t grow on trees you know.”
“If you would allow me to continue ...”
Ford nodded dejectedly.
“Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich.”
Ford stared in disbelief at the crowd who were murmuring appreciatively at this and greedily fingering the wads of leaves with which their track suits were stuffed.
“But we have also,” continued the Management Consultant, “run into a small inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying one ship’s peanut.”
Murmurs of alarm came from the crowd. The Management Consultant waved them down.
“So in order to obviate this problem,” he continued, “and effectively revaluate the leaf, we are about to embark on a massive defoliation campaign, and ... er, burn down all the forests. I think you’ll all agree that’s a sensible move under the circumstances.”
The crowd seemed a little uncertain about this for a second or two until someone pointed out how much this would increase the value of the leaves in their pockets whereupon they let out whoops of delight and gave the Management Consultant a standing ovation. The accountants amongst them looked forward to a profitable Autumn.
- Douglas Adams, The Restaurant at the End of the Universe