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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: John Vosilla who wrote (22705)12/1/2004 12:38:59 PM
From: russwinter  Read Replies (2) of 110194
 
Example of "losers" or as Shostak calls it "late receivers", from Bubble economics. Middle class housing squeeze out in Arizona, more "two America's" brought to you courtesy of Easy Al.
azcentral.com

The entire idea that policies of intervention can somehow bring the economy onto a path of stability is untenable. A policy of intervention always benefits some individuals at the expense of other individuals. It always leads to a redistribution of real wealth and weakens the process of wealth formation. The fact that individuals can correctly anticipate the future course of the monetary policy of the Fed cannot undo the damage that such future policies will inflict on the economy.

When new money is injected there are always first recipients of the newly injected money who benefit from this injection. The first recipients, with more money at their disposal, can now acquire a greater amount of goods while the prices of these goods are still unchanged. As money starts to move around, the prices of goods begin to rise. Consequently a late receiver benefits to a lesser extent from monetary injections, or may even find that most prices have risen so much that they can now afford less goods. In short, increases in money supply lead to a redistribution of real wealth from later recipients, or nonrecipients of money to the earlier recipients.

mises.org
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