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Jul. 9th, 2015|08:00 pm |
Interesting question :) The difference, I think, is the mechanism used and the sector in which inflation is occurring. In the current state we have now, there is no debt-free printing press. Instead the money is created and loaned as debt into one particular area (bank mortgages dwarf other types of bank loans, at least in the UK). This is, possibly, one reason we have the CPI (not including house prices) and the RPI as a measure of inflation. The aim, by the way (IMHO) isn't necessarily to inflate house prices, but keep the prices high (for obvious reasons). If there is inflation in the sector, it can be controlled by the banking sector, and it is not detrimental to their activities as it creates their main revenue stream.
Re govt. collusion, some commentators in the UK have attributed the Conservative party's recent victory down to their role in re-inflating the housing market through their right to buy (or help to buy - I can't remember) schemes. Property owners (or mortgage holders) feel richer when house prices rise. |
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