Saturday, February 21, 2009

VDH's Private Papers::Pause and Take a Deep Breath

VDH's Private Papers::Pause and Take a Deep Breath:

"I think we are seeing the most marked redistribution of wealth in our recent history. The erosion of home equity and, especially, the 20-30% decline in 401(k)s — followed by nearly $1 trillion in additional entitlement spending (“stimulus”) — mean essentially that much of the capital in the hands of those who owned property and had stocks and mutual funds was destroyed and will be recreated by transferring monies to others. How odd that the printing of billions of new paper dollars to spread the wealth is offset by the virtual destruction of billions of old paper dollars in savings and home equity. Maybe that will slow inflation (e.g., some of us figuratively had money burned up at about the same amount that more was printed afresh). In any case, we live in the age of the debtor — low interest, soon to be high inflation, all sorts of plans to alleviate debt, and government transfers favoring those who owe rather than those who saved."

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