Doug Noland on Reflation
Doug Noland is fast becoming a popular online analyst, focusing in particular on monetary policy. He releases a weekly report that summarises global policy developments and market movements in rapid fire succession. Essential reading, very handy for podcasters!. Doug says:
But I would argue that this unfolding bubble dynamic has greater potential to engulf the entire world than even US -style mortgages and derivatives did starting back around 2002. Welcome to the new world of synchronized stimulus, deficits, and reflationary policymaking. I don’t believe true systemic deflation (as opposed to collapsing asset bubbles) is a high probability scenario as long as the government finance bubble is rapidly inflating. All bets are off, however, if confidence in government debt falters. The worst case scenario – that should be avoided at all costs – is a massive inflation of government claims that sets the stage for a devastating bust.
One day the Noland’s will understand the Putland’s and land price inflation will be seen as the bug bear that must be addressed over and above banking regulation and printing presses.
Land speculation equates to gambling on the less fortunate’s human right to a roof over their head.
It is the exploitation of this principal human need for a place on this planet that enshrouds us in the invisible chains that record mortgage payments dictate.