Inflation or Deflation? Where are we going next?

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http://www.amazon.co.uk/Bank-Future-Protect-Before-Governments/dp/1907720375

Simon Dixon here and welcome to one of our accompanying videos for Chapter Three of my book 'Bank to the future'.

The book combines fiction and nonfiction and takes you on a time travelling journey through real life financial events that we learn from to fix our broken financial system.

At the same time we learn how to protect our future on this journey without boring you to tears with financial jargon written for anybody to enjoy and understand.

So what is the Free Economy?

The question of deflation v. inflation is fueling debate all wound the world at the moment.

Is inflation good and deflation bad?

Will prices go up and fuel a boom or will prices go down making everything cheaper.
Will prices go up by printing away the value of currency or will asset prices go down crashing the economy?

What causes inflation?

Is it the fact that governments print too much money as many would have you believe or is it the fact that banks create money as debt and inflation is caused by businesses increasing prices to service the interest on their debts.

Whoever you speak to has a different answer.

It is my belief that the reason why many have been expecting runaway inflation in many countries, but it has not occurred is because we live in a unique time known as the free economy.

There a few facts that are hard to deny no matter what your view on inflation and deflation.

Fact - property price inflation is caused by banks. There is one main reason why the price of property always increases over time and that is because banks create 97% of our money supply as debt and the banks favourite asset class for creating money is through mortgages. Banks like the security of lending against an asset that most wish to purchase that cannot run away if the debt becomes unaffordable or left unpaid by the borrower. This fact is the reason why property prices always increase over time and have now increased well beyond the affordability of everyday people who's real wages are decreasing.

This one fact is the main cause of more inequality in our world than anything else and property has become the main tool by which banks create money and skim interest out of an economy with no productive growth or real increase in jobs. This effect is inflationary.

Fact - since the birth of the internet businesses have been in an ever increasing drive to offer the goods and services they used to charge for for free before their competitors drive them out of business by offering their same service for free.

The need to offer goods and services for free is a job killer for many businesses and converges jobs to the large corporate who can sustain a free business model. This force is driving the free economy and causing the digitisation of everything in order to reduce costs so the price converges to free. This effect is deflationary.

Fact - central banks all around the world have been pumping money into their economies through quantitative easing in an attempt to artificially cause inflation in their economies. These programmes tend to make their way into stock markets and financial speculative markets first causing stock market and bond market inflation.

Pu these forces together and you have asset price inflation through banks and central banks and a decrease in real wages thanks to the free economy.

The worst of both worlds if you do not own those assets. It is the free economy that requires everybody to need to understand the rules that govern finance, technology and money in order to get on the right side of the free economy and one of the reasons I wrote the book so that everybody can understand finance, technology and money.

In Chapter Three of 'Bank to the Future', we investigate the free economy in detail and how it affects you.

Welcome to the free economy and enjoy the chapter.

You can get your copy here:

http://www.amazon.co.uk/Bank-Future-Protect-Before-Governments/dp/1907720375