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1) Just another example of a completely incoherent strategy......That will end miserably. @APompliano @PrestonPysh @CaitlinLong_ @RaoulGMI @LynAldenContact
2) Federal reserve (in a desperate effort to drive inflation) takes rates to near zero and start the printing press. marketwatch.com/story/trump-pr…
3) In doing so, they waste a staggering amount of stimulus $$ by manipulating markets and removing free market price discovery.
4) Which keeps asset prices high (in this case - Real Estate) AND encourages people to take on even more debt (because debt is so cheap) to buy more real estate (because real estate is a store of value against that money printing)
5) Which pushes real estate prices even higher (and rents on that real estate rise in lockstep)
6) Which concentrates wealth into asset owners hands faster (and because rents rise in lockstep - it picks the pockets of non-asset owners faster too)
7) So - with millions unemployed and unable to pay the rent on those "assets" (that are artificially raised in price by the Fed in the first place) ......
8) The government is then forced to step in and "save" those renters (that same renters that their policy is crushing) washingtonpost.com/business/2020/…
9) Wasting more Government $$ and creating conflict with landlords -(that piled on debt because of that same Fed policy)
10) Trillions of wasted dollars (and we're only just getting started) pushing us further away from the root cause of it all.
11) That technology today has changed the rules of the game and Central banks (playing a different game) have no ability to stop it. (short of destroying their currencies) By trying to - they only make the problem and "eventual unwind" worse.
12) Technology and quantitative easing exist in a perverse feedback loop. (there are opposite forces -quantitative easing trying to increase prices while technology trying to decrease prices)
13) By driving quantitative easing against the bigger force of technology - it creates a death spiral in banking profitability, resulting in tightening credit conditions for consumers and easier credit conditions for technology companies.
14) The technology companies in turn accelerate job losses in industry after industry as they automate functions. Ultimately resulting in drastic social unrest and the creation of a new world order.
Be safe out there!
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Jeff Booth
@JeffBooth
1) In the game Monopoly, once enough properties are owned by a single player, renters can't afford to pay rents and are therefore forced into bankruptcy - and the game ends.
2) For those who have played, you will notice how systems work. ie - Once you have an early advantage, the game becomes easier (because you have the rents) to acquire more properties, add more houses/hotels. A "positive feedback loop" is created - concentrating wealth.
3) You might also notice that the wealth in the game "might" be due to luck - landing on the right squares early in the game gives you a massive advantage. Right place right time.
Read 12 tweets
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Jeff Booth
@JeffBooth
We are told we need inflation. This is not true. It only seems true because the rules of the game were designed that way.
An inflationary environment that was manufactured by central banks - and once they were caught in it, they didn't see a way out. So, instead of facing new facts - That technology brings efficiency and allows prices to fall, they "doubled down" on inflation.
2) We are now part in a system that requires ever more inflation, jobs and higher taxes to pay for a "black hole" of debt that can never be paid back. Unable to reach escape velocity from the "debt gravity" Central banks actual fuel the thing they fear most. "deflation"
Read 18 tweets
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Jeff Booth
@JeffBooth
1) Technological deflation was impacting economies long before Covid19. With technology you would continue to get more for less. If natural forces were at play, prices of EVERYTHING would fall.
2) That didn't happen. It was hidden - through massive injections of debt that could never be re-paid. 185 trillion added in last 20 years to achieve 46 Trillion of GDP growth. Creating a problem so BIG - that governments continue(d) to be "forced" to bail out existing system.
3) Not because they wanted to - but, because letting the system fail and go through a disorderly unwind (as Capitalism calls for) might have been a worse alternative in a set of bad choices. ie - a global banking system collapsing and entering into a prolonged global depression.
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