I'm not saying that cheap money has nothing to do with it....it is a factor. Every major asset bubble starts when money is cheap and people get a bit too selfish. They borrow heaps, inflating asset prices, then use the inflated asset values as collateral for further loans to buy more assets at prices above their income generating potential. Eventually there's a circuit breaker (typically an unemployment spike) and the last people to get on the boat cop it bad.
The only issue is the inability to service the debts/loans/credit. There is never sufficient money created to service both the loans and the interest payments.
If money is apples and I supply all the apples to the apple money supply of appleland then I am a monopolist when I loan everyone 10 apples but they all have to pay me back 11 apples.
If I've created 10,000 million apples and loaned it all to the 20 million appleland citizens and they all had to pay (give) back all the apples I loaned them to wipe out the original loans + one extra apple for the apple-service I've provided coming from each of the 20 million borrowers, where are these 20 million apples going to be found in my applelands apple-supply, 20 million apples that I never created and released/loaned into the apple-supply?
Appleland citizens now collectively owe me 10,020 million apples.
Do you realise the consequences unfolding down-the-line?
Values are man-made agreements, my box of apples for your box of oranges, etc, etc. There is no inflation. We have a hand-shake agreement between us. But when you bring completely unfair commercial considerations in between the trade of applelands citizens, the labour, services and produce is now deeply compromised.
Now, all appleland citizens must use my apples to trade between them. My apple-government dictates this law over all apple-land citizens.
And I've got appleland laws in place to protect my monopoly from forgery, etc.
All the labour, produce and services are in tact, its available in great abundance everywhere, but now a % of appleland citizens are deeply compromised because apples is now the heart of all business-agreements which effects the actual labour, produce and services produced by appleland citizens for appleland-citizens.
My apples have become more important than the goods, services and labour now, and I can manipulate the value of the apples, how they get paid, how many I create, how many I make them pay me back for all apples loaned, etc, and this affects all labour, goods, services, etc. My apples are now more important than the lives and well being of all Appleland citizens.
My apple-supply business is destroying the well being of good-hearted hard working appleland citizens.
Over the past 120 years, many economic depressions have occurred across earth. We've had many nations containing heaps of available labour, services and produce, all the shops were full of stock, BUT there was no money to pay to make the world ("The System") go around.
What's the bet that an uprising of appleland citizens is on the cards down-the-line and me and my cohorts will all be hanged. It has happened before Barry and more than once.
If the appleland money supply is a bath-tub half full of apples and with the tap on and the plug out, as long as the apples exiting the bathtub (to pay off the loans whence they came) equals the amount of new apples coming into the bathtub (new loans created), the appleland money supply is generally stable.
But if we want a depression we just turn off the tap with the plug still out. All loans are still extinguishing many apples from the apple-supply because all loans are still being paid off, and no new apples (loans) are being created to bolster the money supply. The level inside the bathtub drops and drops and drops and drops until it is empty.
All my apple-land citizens are deeply f**ked-over that's unless they start a black-market, but I've got my apple-land armies, navies, air-force, police, etc, to counter. I don't want these scum undermining my power and control over them. If me and my cohorts still have all the power I can create whatever outcome that suits my monopolistic agenda, most importantly to strengthen my power and control over all the people long-term so that me and my cohorts descendants inherit all the power over all apple-land citizens.
If we want a recession we just turn the tap up.... We still leave the plug out but we have increased the volume of apples entering the apple-supply. The level rises up and up and up inside the bathtub until it overflows. There are now more apples coming into the apple-supply than going down the sink-hole paying off loans. Now we have more competition over labour, services, produce, land, homes, etc, etc...
The circuit breaker is my apple-supply business. All else is f**king cosmetic bullshit.
And as I create all the apples out of thin air, me and my extensive network of cohorts in all fields of "The System", all in important positions, all who sold out to my secretive, non-full-disclosure scams (Freemasons), we get to "own" EVERYTHING down-the-line, the whole of Earth. Is why all land-tiles deeds say all Aussie citizens are tenants, does not matter if you have a mortgage or not. Fee Simple does not exist.
