In the second part of my Get Rich Education interview, Keith Weinhold and I discuss the causes of inflation in the 21st Century and how inflation could impact real estate investors.

In the past, rapid money supply growth caused high rates of inflation and a surge in interest rates. That is no longer the case today. If it were, then the explosion of money created through Quantitative Easing in the United States, Europe and Japan in recent years would have caused hyperinflation. It didn’t. Instead, central banks have had to struggle to prevent deflation.

This proves that inflation is not always a “monetary phenomenon”, as Milton Friedman once famously asserted. The price level is also impacted by supply and demand. There are inflationary supply shocks and deflationary supply shocks. And there are inflationary demand shocks and deflationary demand shocks.

The dominant factor determining prices in recent decades has been a Deflationary Labor Supply Shock: Globalization. The addition of billions of workers from low-wage countries to the global labor pool has pushed down wages and prices and interest rates from the early 1980s onward. Real Estate prices skyrocketed higher as the inflation rate and interest rates fell.

Today, we are on the brink of an all-out trade war between the United States and the rest of the world. A trade war that reverses Globalization would set off an Inflationary Supply Shock that would be far more damaging than the two oil shocks of the 1970s that led to double digit inflation around the world.

Keith and I discuss the changes in the global economy that brought us to this point and where we may be headed next.

Click here to listen to this interview now.

Get Rich Education is dedicated to teaching individuals how to accumulate wealth through investing in rental properties. Keith’s excellent weekly podcast is one of America’s top investment shows. To learn more, visit the Get Rich Education website at: https://www.getricheducation.com