

The derelict mansions on London's 'Billionaires' Row' - coupdegrace
http://www.cnn.com/2014/02/24/business/the-derelict-mansions-on-britains-billionaires-row/index.html?hpt=hp_c3

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ergoproxy
The topic of dilapidated mansions on "Billionaire's Row" in London was also
discussed on the Keiser Report, episode 558, Feb 4, 2014:
[http://www.youtube.com/watch?v=ni9AfsK5EdY&t=437](http://www.youtube.com/watch?v=ni9AfsK5EdY&t=437)

The housing bubble is fueled by central bank money printing. This is a good
reminder of the problems caused by speculating with bank created debt:
"Speculation, therefore, is to be condemned on two grounds: First, because it
is a non-productive business; and, secondly, because it diverts wealth from
productive business, thereby disturbing prices and adding to the burdens of
society." Quoted from "The Bank as a Promoter of Speculation", p. 658, March
1872,
[http://books.google.com/books?id=QuMzAQAAMAAJ](http://books.google.com/books?id=QuMzAQAAMAAJ)

"non-productive": Speculation on these homes not only fails to create new
wealth, it also destroys existing wealth--these homes are falling into
disrepair because the owners don't want or need to maintain them. Their prices
will rise, even if they fall apart.

"diverts wealth from productive business": If I own a factory that actually
creates wealth, even if it is profitable, unless it is as profitable as real
estate speculation, then market forces are going to lead me to (1) raise my
prices as much as I can get away with and demand my workers accept cuts to pay
and benefits; or, if that's not enough, (2) liquidate my factory, fire my
entire work force, and bet my capital on real estate. In this respect, central
bank money-printing and the speculative bubbles it creates can be seen to be
both deflationary (i.e., creates unemployment and puts downward pressure on
wages) and inflationary (i.e., creates shortages and higher prices for
consumer goods as well as higher prices for speculative assets) at the same
time.

