the Future Financial Freedom group

Over time people have become confused between money and wealth. This is precisely what central bankers have had to do to convince consumers to borrow and spend recklessly. If any part of the government/ Federal Reserve/ banking system is operating well, it's their public relations/ advertising/ media division.

At any period, there's a certain amount of wealth in the economy, yet government has created much more "money" over very short periods to intermediate that wealth. Thus wealth per "dollar" has been diluted vastly.

Money is not wealth. We can create as much money as we want through an operating fractional banking system by creating associated debt.. that is, until there's so much debt that even at zero percent rates we can no longer service that debt.

Those without debt and with assets have real wealth. Those that have used debt to purchase inflated assets have no real wealth. The government seems determined to reflate asset prices to make people feel wealthy again!

In a credit based system it is necessary for people to lend and borrow through the fractional banking system, which multiplies debt, in order to drive asset prices higher. So consumers must have the ability to borrow but with consumer debt at a near high, the consumer is clearly in no shape to borrow again.

The resultant effect is debt reduction. So expect over the next several years that some prices will rise (necessities); some will fall (discretionary assets), but deflation (debt reduction) will take its course.. whether government wants it to or not.