Fake money has been a disaster. From Bill Bonner at bonnerprivateresearch.substack.com:
Here’s what happens when you leave interest rates way too low for way too long…
(Source: Getty Images)
Bill Bonner, reckoning today from Dublin, Ireland…
Erratum: we got our charts mixed up yesterday. No problem; we’re sure you figured it out.
Our story so far…
Presidential candidate, Robert F. Kennedy, Jr., wanted to know what we thought.
“Go back and read our daily messages for the last 25 years,” we might have said.
“And don’t miss our 5 books; you need to read those too.”
Instead, we prepared an ‘executive summary.’ In Part I, yesterday, we explained how the post-1971 dollar was cut loose from the real world of time and resources. Its gold backing was removed. This allowed the financial economy to race ahead of the real economy of goods and services.
Money is just a way of keeping track of who owes what to whom, like tickets in a parking garage. ‘Financialization’ is what happens when you add tickets; you go to get your car and find that someone else has driven away in it. It meant that a lot of people thought they had ‘wealth’ that didn’t really exist. Their stocks weren’t worth as much as they hoped. Their houses were over-priced. Their pensions were under-funded. Their government deficits piled up…waiting for a day of reckoning. Our chart showed GDP output practically flat, while “assets” increased 10 times.
So, let us pick up our letter to RFK,Jr. (we promised fewer than 1,000 words…alas, we ran over), where we left off:
Dear Robert,
The second major change to the financial system occurred in the late ‘80s when Alan Greenspan gave out his famous ‘Greenspan Put.’ Investors then knew that the game was rigged – in their favor. When they made money, they pocketed the gains. When they lost money, the losses were shared out – by lowering interest rates and inflating the currency – to the general population.
