Home > Predictions > If you don’t think we’re living in a centrally-planned economy, look again

If you don’t think we’re living in a centrally-planned economy, look again

House prices are set by the “market”, eh?  Are you sure?

The CME has just killed off the oil and silver markets by raising margins.  Again.  And again.  And again.

So it’s clear that the regulators can manipulate prices by manipulating margin requirements in any asset market.

But banks over 20 years have reduced the deposit levels required by housebuyers to buy.  To zero in many cases.  Why?  Well, banks earn most of their income from speculative property investment.  And governments earn most of their money from the construction and property and banking sector, so have a vested interest in keeping housing prices on the up and up.

What does this suggest?

Price appreciation in asset markets is not a function of “the economy” but a function of what some powerful bureaucrats want.  You want a price drop?  Raise the margin/deposit required to purchase.  You want to stoke up the price?  Reduce the margin/deposit required to purchase – to zero (or less than zero) if you really want to blow a bubble.

Simple.

But let’s not call this a free market.

And let’s expect massive surpluses and shortages as the price fixers and controllers tinker around like this – until we arrive in economic Hell.

Call the Perth Mint and ask for 100 ounce bars of silver and see what happens.

Economics at work.

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