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