A Black Hole In Economics: Money Creation And Its Consequences, Session Five
Bad Money Creation: The Statist Wrecking Ball
Happy New Year! I hope your holiday break was as delightful as mine.
The coming year promises to be exciting in so many ways. Despite the many challenges facing us, I am eagerly looking forward to seeing how the near-term economic future unfolds.
Today, we present Session Five of my nine-lesson course, “A Black Hole In Economics: Money Creation And Its Consequences.” In our last session, “Good Money Creation - The Capitalist Money Factory,” we explored the positive effects of productive money creation. Today’s lesson looks at the opposite side of the money creation coin. Our title for today is “Bad Money Creation: The Statist Wrecking Ball.” The negative implication of this session’s title will soon become apparent.
Our theme today is that inflation should be understood as much more than an unwanted increase in consumer prices. Properly defined inflation is an increase in the quantity of money caused by government policies, with many adverse economic effects, consumer price rises being but one of these. In this session, we illustrate and validate this model of inflation by analyzing two of the great financial bubbles in modern history: the Japanese real estate and stock market bubble from 1980 to 1989 and the era of Quantitative Easing from 2009 to 2022.
I was happy with this presentation because it uses actual events and data from recent history to support my analysis. I’d like to know what you think, so please share your thoughts in the comments section below, especially if you don’t agree.
You can enjoy the session at 1.25 if you’re pressed for time. As usual, I’ve attached a pdf manuscript with bonus information for readers.
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Thanks for listening or reading.
HardmoneyJim
January 5, 2024
I found it interesting that you brought up the dinner talk dictionary thing and also when you touched on the importance of context in all that we look at to get a fuller understanding of inflation. Mr Reisman does give a wise viewpoint on inflation and money creation, as well as how to resurrect a gold standard.
And you brought a smile to my face when discussing Japan's economic history, the woes of central planning. I was working in the lumber industry at the time and in the 70s and 80s Japan was considered the unstoppable economic engine of the world. In the 90s it fell to the world beggar. As you say, the human tragedy does not seem to register in the minds of those who are responsible for creating them through the manipulation of the money supply.
The scale of the money manipulation you describe is mindboggling. I look forward to seeing what you have to say as to solving this problem.