Thomas Jefferson warn about central banks .Doesn’t this quote remind you what is going on now in America?
“If the American people ever allow private banks to control the issue of there currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.”
First by inflation….
The inflation or the increase of the currency supply is like leads to higher prices . In this case its asset prices. If you are the holder of the asset , price inflation is good for you. Even better if you have go into debt to purchase the asset. This is the case for most people. Now this sounds like a great deal . Your house will increase greater than the mortgage loan you took out.
Now there is only one problem the same inflation that inflated away your debt has also caused the value of the house to incase. Meaning the next person has to go even more in debt because of currency has lost value and so has their wages.
When prices are increasing faster than people are able to afford this is what is called a bubble. When the bubble burst here comes the deflation. The asset price falls but the value of debt remains the same . This is what happens when you get foreclosed on . The bank now owns the house. So someone may ask why doesn’t the fed keep asset prices up?
About ten years ago the real estate bubble burst . Fast forward to today . We have home ownership at its lowest rate in decades. Yet we have home prices at near all time high adjusted for inflation. How does this make any sense? Could it be the fed is creating another bubble?
Since the housing bubble of the late 2000s is still in most people memories . The new generation is not buying homes partly due knowing what happened during the last bubble bursting as well as lack of good paying jobs. So as a result they are renting instead of buying .
The real estate bubble is causing rents increase , due to increase in mortgage payments as well as other cost. The rents are the highest in cites with where home prices are increase much higher than the rest of the country in cities like NYC, SF.
If the rent is to dam high and the home prices and to dam high what is the solution, was Jefferson right about how central banks would end up enslaving the nation?