Asset Inflation and Illusions of Prosperity

Brendan Brown () and Robert Pringle ()
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Brendan Brown: Hudson Institute
Robert Pringle: Central Banking Publications

Chapter Chapter 6 in A Guide to Good Money, 2022, pp 83-99 from Springer

Abstract: Abstract Bad money can create enticing illusions of prosperity. These illusions stem in part from the fact that the damage done by monetary inflation often remains long hidden from public view. In this chapter, the authors draw out and analyse the illusions of wealth which form under conditions of asset inflation, how they loom so large, how some may morph into reality and how the rest collapse in disillusionment and frustration. They also look in particular at one of the biggest illusions—the accumulation of wealth in residential real estate markets. This is often enhanced by the way borrowers garner revenues from monetary taxation.

Keywords: Asset inflations drive excess leverage; Behavioural finance’s money blindspot; Bricks and mortar fantasies; Camouflaged leverage; Efficient markets become fantasy under asset inflation; Financial engineering; Housing wealth illusions under asset inflation; Illusions of economic stimulus; Illusions of the super-long business cycle; Illusory flights from monetary taxation; Monopoly capitalism thrives on asset inflation illusions; Speculative narratives under asset inflation (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-06041-0_6

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DOI: 10.1007/978-3-031-06041-0_6

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