Cycles of inflation and deflation: money, debt, and the 1990s
This work examines the role money and debt play in our economy. It shows why we went from the gold standard to flat money, why that led to increasing inflation up to 1980, and why inflation has receded since 1980. In addition, it explains how today's economic problems arose, why governments cannot solve those problems, and where those problems will lead us. Challenging conventional wisdom, the author suggests that high real interest rates in the 1980s reduced business' ability to profit by expanding productive capacity and reduced the attractiveness of borrowing for consumption. The resulting drive to buy assets instead, such as stocks and real estate, caused rapidly rising prices in those areas. The author foresees a depression resulting from these economic forces--one which governments will be unable to prevent.
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The Gold Standard Was an Automatic Stabilizer
The Domino Effect
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American dollar assets baby boom bank loans bank reserves boom buyers buying power cash flows cause commodity companies cost-push inflation cost-push phase costs created cycles deflation demand demand-pull inflation Department of Commerce earnings earnings yields economy Eurodollars excess capacity fear Fiat Money finances forecasts foreign give Gold Standard government borrowing government debt government deficits grew high real interest higher house prices hyperinflation inflation rates invest junk bonds land prices LDCs lend lenders less living standards long-term lower interest rates million money growth money supply money supply grow money velocity nations non-banks paper money percent prices rose private borrowing private debt problems profits raise output real estate prices real interest rates recession recovery reduce rents repay savings selling government debt soared speculative stock market stock prices store of value taxes trade deficits treasury bills trend U.S. Department unemployment United usually workers