How bankers have made you poor throughout history

I am often asked how precisely I came to view the world the way I do. Something I call viewing the world via the “lens of the real estate cycle”.

This perspective informs me of the topics I choose to write about each week and my interpretation.

Honestly, what creates my worldview isn’t a secret.

I read a lot.

Not just anything, mind, but a select number of books that I can relate to and allow me to see the world for what it truly is.

Today I will give you a glimpse into the writing of one of the key authors I follow.

Which means, you too can use those same books to inform and enlighten yourself. And by extension, develop an ability to see the world in a manner few in the world ever will.

I was reminded of this once again thanks to a brilliant recent podcast episode by the publisher by Shepheard Walwyn. In it, the host, Jonathan Brown, interviewed Shepheard Walwyn’s most famous author, Michael Hudson.

Hudson is the author of one of SW’s best-selling books, A Philosophy for a Fair Society.

Now, it just so happens Jonathan asked Michael a specific question about bankers and their control of the economy (in this case the Australian one).

In a few quick minutes, the brilliant and articulate response given by Hudson not only instantly captured what society in Australia has become but encapsulated what every other nation that choses to allow banks to own the earth we live on also experiences.

Here is how he put it.

“…I’ve met with the central bankers of Australia, and it is clear to me that Australia is pretty much run by the banks. The banks have made most of their fortunes by creating what looks to me like the most oppressive real estate bubble in the entire world.

And basically, in Australia, just like in England and Europe and America, the value of a house is whatever a bank will lend against it because, you can sell your house for however much a new buyer can take out a mortgage.

And how do the buyers bid against each other to make a winning bidder for the property? They promise to pay as much of the land rent as possible to the bank as interest.

So, the question is, who is Australia going to put first – its own growth interests or the wealth of its banks?

But they don’t realize that at the high prices that Australian real estate charges, it’s going to be very hard to be competitive in a world economy. And that’s why Australia is dependent on financing its balance of payments by mineral exports, iron exports.

One banker explained to me Australia’s very fortunate to live in a nice neighborhood of China so that it can have the Chinese market for its minerals. And also makes a lot of money by foreign students coming to its universities. This is not an industrial economy as such…”

I have always regarded Hudson as one of the few on earth who can both explain the concept of economic rent elegantly and cut right to the heart of the matter in a few sentences.

That is why I follow his work.

And why I’ve read, and then re-read, his seminal work A Philosophy for a Fair Society.

I cannot recommend his book more highly.

Particularly now, at this given moment in the current 18.6-year Real Estate Cycle.

If you need to know what awaits us all over the next few years and want to build upon and expand your own knowledge of the real estate cycle that you’ve learnt via these free weekly newsletters, then get this book onto your bookshelf.

Simply click on the embedded link below and follow the prompts.

A philosophy for a Fair Society 2nd Edition
by Michael Hudson, G.J. Miller, Kris Feder, Fred Harrison A Philosophy for a Fair Society helps you think about money, power, and fairness in a new and easy way.