Paul Cunnington, The Unintentional Economist

Last week we heard from economist Paul Cunnington, a purveyor of pragmatism.

Several of his pronouncements were as follows:

Steve Barton, Pres. Elect Jim Horrigan, with Paul Cunnington
Steve Barton, Pres. Elect Jim Horrigan, with Paul Cunnington
  • The media are not honest.
  • 95% of what is written or spoken about the economy is either wrong or irrelevant.
  • Nothing should be taken for granted.
  • Money does not disappear; it just changes hands.
  • Those who are informed accumulate fortunes, the actions of Soros, et al, being an example.
  • The movement of money runs through the stock and real estate markets. When one rises, the other declines.
  • When real estate drops, the strength of the US dollar follows.
  • A drop in oil prices was caused by the dollar getting cheaper.
  • Chinese investment in the US is in commercial real estate
  • As money flows in from China, these currents can change and affect many lives.
  • Fluctuations in credit affect the economy more than the supply of money.
  • When mortgages are widespread, money comes “out of the air”. The price of goods and services rises.
  • Sufficient money must be created to pay principals and interests.
  • This cannot go on forever.
  • Debt can be used productively to grow the economy.
  • Debt is non-productive when it is used for spending.
  • Debt cannot pay back principal and interest.
  • When debt creation is large, prices rise.
  • It takes $3 of debt to produce $1 of growth. This is bad for future generations.
  • Rising debt, with people borrowing money to spend it, means higher stock market risk.
  • With money not being paid back, recession results.
  • The times for recovery from recession loom longer and longer, accompanied by a drop in the economy
  • An apparent rise in the stock market does not always mean we are in a favorable growth period.
  • A long -term debt cycle recovery time is 60-80 years.
  • A lot of manufacturing has left us due to government debt policy/trade deficit.
  • With debt rising and the deficit greater, this does not mean we have growth.
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Comment: According to the speaker, things are not exactly looking up

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