Inflation is a Two Headed Snake

By Dean

ow that the global financial nobility has decided to help itself to the GSE money faucet attached to the US Treasury, we can expect more speculation and inflation, unless we take measures now to delink the excesses of the elites from affecting the rest of us.    The stealth “stimulus package” that the political elites passed for the sake of cloaking the expansion of the GSE funds is simply another proof positive that democracy is dead. The nobility rules, we are all only peons in their game.  We are the “munks” they speak of, useful to them only to bear their burden.

We will “work out” their speculative fluff in time, apparently that is our role. All they have to do is to control their corrupt crony capitalist system, and to soften our minds using the power of their mass media.  At this point we must find ways to isolate ourselves from the next financial binge of the nobility, so that we will not be washed away in their “excess liquidity” once again.

The two Sides

Inflation has two faces, one for the nobility, another for the People. Speculation sometimes breeds inflation, as anyone can see with the current real estate bubble, yet it does not affect the price of the “stuff” at Wal-Mart.   Speculation is a problem only if it links the two halves together. If the have nots have to pay for the excesses of the haves.   The People really do not care how much a diamond tiara costs, nor how much they must pay for the latest Ferrari sports car.  We are consumers of goods and services that can be manufactured or grown repeatedly, we do not need ostentatious goods that are one of a kind or scarce.

The global nobility speculates in scare recourses that enhances their perception of individual power, such as jewelry, sports cars, gourmet foods, fine wines, and so on.  The People are not ensnared by the nobility’s burden of ego-supremacy.  Who cares how much that vulgar martinet with the plastic toupee paid for his gauche gold plated crib?

It is the nexus between the two worlds that causes the suffering of financial speculation.  If the link is broken, we can live and thrive in a two tiered economy for some time.  To the rich:  their ostentatious individualism and speculation, to the People:  their social solidarity and real value. To quote Lao Tzu: Expensive goods should not be shown to the People, to keep them from contention.

Real value is the value that work gives to money.  Speculative value is the financial exploitation of scare resources.   The nobility can not effectively speculate in a free economy, where repeatable goods and services can be produced in quantity, where abundance is derived from free competition  and distribution.  

However, when the nobility is granted access to unmovable resources that we need, such as our housing, then we do have a problem.  There is a nexus between the two worlds in the real estate market.  The global nobility is able to buy as many homes as their vast resources will allow, increasing the price of all homes, to the point they become unaffordable even for the homeowners living in them.  

That is why we must prevent real estate speculation at all costs, especially now that the nobility will help itself to the Fanny / Fredy funds, guaranteeing their speculative mortgages up to a million dollars.     The GSE’s have access to the US Treasury to generate (“print”) new money for mortgages, and then guarantee payment of same.  The GSE’s will be allowed to bail out speculators in Dubai and Geneva, New York and Moscow. Their original charter was to fund homeowners in the USA, not to be at the service of global sharks in search of easy money.   

The Solution:

The GSE’s must not be allowed to extend mortgage guarantees to speculators who do not live in the home they are soliciting.   If we only allow GSE’s to fund home mortgages for those people who will  live in their homes full time, then we will destroy the nexus.  No more easy money for vacation homes in Vail, no more cum to play with in Las Vegas.

Surely the problem is not one of lack of money, it is the lack of real value in the money.  That is why we get inundated with credit card offers at every turn, we can “work it off” that way.  We can become "mortage slaves" and hitch  ourselves up to their faux funds to work off their cum, in 20 years of toil, if they will allow us to keep our jobs.  Yeah, Masta... yes Suh.... please Mister ...  

Let it be, as Sir Paul McCartney sang, Let it Be, we will all be better off.  Who knows, maybe some of that speculation will trickle down to us “munks”.   In the mean time, just watch the elites drive by in their own fancy units, “como cerotes en vitrina”! as they say in Guatemala.

Atlanta, GA
Feb 15, 2008

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