Saturday, July 9, 2011

More Signs that Bernanke's Monopoly Money is Revving Up the Bay Area Tech Economy

The tireless Bob Wenzel, over at Economic Policy Journal, points to more signs that Ben Bernanke's efforts to inflate the U.S. into an economic recovery are starting to take shape. The latest clue? Soaring rents for office space in San Francisco. Bob points to this piece in the San Francisco Chronicle, which describes how a flood of technology companies into the market have pushed office rents up 19% in the past year. He also relays a reader email from an entrepreneur running an online game company, whose rent in the city was hiked by 65%. This suggests that well-connected venture capitalists are sending the freshly printed dollars from QE 2 into a brand-new Bay Area tech bubble. This, of course, is not the first indication we've seen that this is occurring.

On one hand, this suggests that the engineers and programmers in Silicon Valley will be well-positioned when the monetary inflation starts to make itself felt in consumer prices. On the other hand, it also suggests that the prosperity we're likely to start seeing along the Peninsula is largely an illusion.

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