Hello,
Welcome to another post from Serfdom Road.
Apologies for the infrequent posting of late. I am still here. Most articles I am writing consume more time and research than earlier. Also, I have been unwell lately. I intend to publish another article shortly but felt compelled to quickly write this one for you. Enjoy.
The Invisible Thief
“Inflation is taxation without legislation”
Milton Friedman (b. 1912, d. 2006)
“Inflation is a way to take people’s wealth from them without having to openly raise taxes. Inflation is the most universal tax of all.”
Thomas Sowell (b. 1930)
“Why do prices increase over the long-term?” “Why does something cost the same but the quantity has been reduced?” “Why is my salary no longer sustaining my living standards?”
These are a few questions you may have asked yourself before.
Unfortunately, the common answers provided by politicians and the media, are: “It’s greedy capitalism!”, “It’s the economy!”, “It’s the [insert war]!”, etc.
One great misunderstanding of the free market (i.e. capitalism), is that prices actually tend to decrease, not increase.
When more people are employed, there is more production - more goods and services than before.
This greater supply exceeds demand, and prices decline.
The electronics industry is a great example.
When the wealthy start buying the latest tech, manufacturers are able to reinvest capital into their business and produce a greater quantity.
This allows the next tranche of people (e.g. the middle class) to buy those same items at a cheaper price.
Salaries can remain constant, but with declining prices, your purchasing power actually increases.
However, salaries can also increase - the greater quantity sold, albeit at a smaller profit margin, allows companies to pay higher wages.
Reinvestment can also lead to greater innovation, and technological advancement.
This happed during the Gilded Age (1870-1900) in the U.S., the Victorian-era in the UK (1837-1901), and the Belle Époque in France (1871-1914).
Side note: Before anyone gets on their high-horse about working conditions, safety standards, the beginning of dynastic family wealth, think about this… would you rather live in the 1700s, or the 1800s?
So how do prices increase over the long-term?
The answer can be found at a nation’s central bank.
Take a look at the chart below from the U.S. Federal Reserve’s FRED site:
The currency supply (M2) and the CPI (inflation) show a clear positive correlation - they also explode higher after 1971 - the year U.S. President Richard Nixon severed the convertibility of the U.S. Dollar into gold.
This is because an expansion of the currency supply is inflation.
This, from the 1913 edition of Webster’s dictionary:
Inflation: “Undue expansion or increase, from overissue; -- said of currency.”
However the definition of inflation is now:
“…a continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services”.
This is nothing but state propaganda, designed to divert blame away from government.
Notice how most central bank’s target 2% inflation each year?
This is the central bank openly admitting to stealing 2% of your purchasing power, per year, by inflating the currency supply - in other words, your cost of living increases by 2% per year, while your salary likely does not.
To make matters worse, due to the Cantillion Effect, inflation helps the wealthy (e.g. investors) while hurting the poor (e.g. wage-earners, and savers).
This is because all prices do not rise at the same time, and with the same proportion.
In the beginning, some sectors can sell goods and services at higher prices (more artificial demand due to an increase in currency supply, e.g. the stock market) while costs are relatively low. However, after some time, other sectors are still only able to sell goods and services at stable prices, while their costs increase.
Inflation is not just an expansion of the currency supply.
Inflation is not just a cause of rising prices.
Inflation hurts the poor more than the rich.
Inflation is the “invisible thief” that steals from the poor, and gives to the rich.
Let’s Go Brandon!
Here are a selection of inflation-related articles that have royally p*ssed me off lately… or actually made me laugh…
Biden Casually Says Food Shortage "Going To Be Real" As Necessary "Price" Of Anti-Russia Sanctions
The poor must suffer the most…
‘Eat Lentils, Poors!’
Really p*ssed me off… and similar articles…
"Fuel Leak" Fears Emerge As Massive Evergreen Container Ship Stuck In Chesapeake Bay
Why can’t Evergreen get decent ship captains? Remember the Suez Canal?
EU Steps Back From Impractical Russia Oil Embargo
HAHAHA!
U.S. lawmakers push for global food aid funding as UN warns of famine
This is inflation in disguise… more prices rises in the future…
570K chickens to be destroyed in Nebraska fight against bird flu
Are they intending to cause a food shortage on purpose?
"There's A Revolt" - Retailers Reach Limits On Prices Increases As Consumers Pushback
Companies can only allow rising to costs to eat away at their profit margin for so long…
"It's Appalling": In Hilarious Reversal, Biden Admin Now Slams Shale For Not Raising Output
Central planning at it’s finest…
Putin Tells West "Don't Blame Me" For Soaring Energy Prices, Releases Banned Exports Partial List
I would be looking out for poison-tipped umbrellas, if I ever upset Putin, but I do agree, he is the scapegoat du jour for the parasitic class of the West…
Russia To Ban Fertilizer Exports To 'Not Friendly' Countries; China Warns US Against Retaliation
Checkmate… Russia is one of, if not, the biggest exporter of fertiliser… and he just cut off supply to the West… more food price rises as crops fail…
Biden's pursuit of Venezuelan oil while shunning US energy and Keystone XL slammed: 'climate craziness'
HAHAHA!
Do Not Be Deceived
In all seriousness, hopefully you can see our politicians are nothing but clowns at best, and psychopaths at worst.
You can set the start of our decline in the West from nearly any point in the last 100 years but it certainly has accelerated since the start of the COVID hysteria.
It is believed the amount of currency “printed” into existence by the U.S. government, after 2000, is greater than all the currency “printed” from 1776 to the turn of the millennium - most of this has surely been created since March 2020?
Not to mention, the enforced closure of businesses, and entire supply chains, often intermittently - a business cannot forecast accurately if does not know whether it will trade at 50%, or 100% of capacity, even in the short-term.
Our politicians, and the media, are becoming increasingly insufferable with pathetic shrieks of, “It’s Brexit!”, “It’s Putin!”, “It’s the pandemic!”, or “It’s climate change!”.
They are to blame.
Their fiat currency Ponzi scheme will end, but first, they will send it into hyperdrive during it’s dying moments.
The poor citizens of Weimar Germany experienced hyperinflation in 1923… nearly 100 years ago.
If history is any guide, one of the best things you can do, is buy gold.
I hope you have found this article insightful and helpful!
Please feel free to comment below.
Kind regards,
Le Libérateur
If you enjoyed this article, please subscribe and share!