“The motivation for taking on debt is to buy assets or claims rising in price. Over the past half-century the aim of financial investment has been less to earn profits on tangible capital investment than to generate “capital” gains (most of which take the form of debt-leveraged land prices, not industrial capital). Annual price gains for property, stocks and bonds far outstrip the reported real estate rents, corporate profits and disposable personal income after paying for essential non-discretionary spending, headed by FIRE [Finance, Insurance, Real Estate]-sector charges.” Real EstateUsuryDebt BondageRentier ClassFinance CapitalismEconomic RentDebt DeflationAsset Price Inflation Book:The Bubble and Beyond Source: The Bubble and Beyond
“A false alarm is sounded that government budget deficits will increase consumer prices — with no discussion of how private-sector credit deflates economies. The problem is that credit is debt — and paying debt service to bankers and bondholders (and various grades of loan sharks) leaves less income available to spend on goods and services. So debt deflation is today’s major problem, not inflation.” Finance CapitalismDebt DeflationMmtModern Monetary TheoryPrice InflationPrivate DebtPublic SpendingRentier Book:The Bubble and Beyond Source: The Bubble and Beyond