Reply #8: Examples of the dangers for politicians, and everyone [View All]

If stocks were to revert to historic valuations or below for some period every pension fund would fail technically. As many are in fact now failing on a legal actuarial basis. Continued stock inflation is assumed by pension funds. They have to. There is no alternative.

Everyones IRA and 401K would suffer, badly. Any politician whose name was associated with hurting everyones 'savings' would be scored and rejected.

If homes deflated that equity increase that tens of millions of households rely upon to tap into and use as a measure of security would evaporate. The repurcussions on general consumption and the economy would be gigantic.

Wages have been stagnet but asset inflation has been the grease to keep things going. Within that lies the reason for the growing disparity of wealth, both income and assets, to the top.

Asset inflation is very seductive. We are now totally seduced. We cannot scorn it for to do so would risk EVERYTHING the average person takes for granted. Asset inflation is so intertwined with the general economy that there is no seperating them.

That is why there is NO political alternative to the status quo. There is no alternative in a democratic, small d, system. The huge majority expect more, endlessly. Asset inflation has been our free lunch. Show me a politician who is calling for lower stock and home prices, or at least one pointing out that they are maladjusted currently and too high and I'll show you..... well not a politician but an internet crackpot. No politician can succeed with any message like that.