Friday, May 30, 2014

Households Are Finding It Tougher Going

Because real income is down, while prices are up.  Real GDP reportedly shrunk during the first quarter for the first time in three years, while the food prices are rising at an annual rate of 22%! This is a consequence of Quantitative Easing Infinity. Monetary inflation via credit expansion fosters malinvestment which consumes capital and constrains economic progress. At the same time, it encourages increases in spending, which result in higher prices.

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