Dear Friends,
It seems to me, the experts claim inflation is under control, if you simply change what you buy. Instead of beef switch to pork, if that becomes too expensive, switch to chicken, and then roadkill… you see, its all in the budgeting. That’s how they come to a 3% inflation rate. After a few more years of this moderate inflation… only the rich will be able to afford road kill. The rest of us will be eating bugs, greenbriar and grass tops. Meanwhile, the federal reserve wants you to know they have it well in hand, but since raising interest rates in an election year would be bad, for the deep state president, they’ll use the wishful thinking method. That should do it. The fact is, inflation wont stop until the incentive for government to cause it, is stopped. There needs to be consequences for deficit spending.
If you believe inflation has “only” gone up 3.8%, there’s a nice water front property on the Sea of Tranquility for you, I’ll sell it cheap. Insurance has doubled in my area. Food has doubled in some cases. Then again, who needs to eat? If you have a dog or cat, has your vet bill only gone up 5%? Mine more than doubled. The price of cars has gone up way more than 10%. A “cheap” car today is 20k. Electricity has risen far more than a mere 4%. Have you filled your car’s fuel tank lately? For the Bureau of Labor Statistics, (BLS) also called Bullshit, Lies and Spin, to come up with that number took some pretty brilliant lying. Then again, exposing the BLS as liars is one reason Snowden lives in Russia and Julian Assange resides in the Belmarsh super max prison.
The Federal Reserve is trying to control inflation by raising interest rates. But the government spends two dollars for every one squeezed out of the little guy by higher interest rates. Milton Friedman’s theory on inflation… growth in money must match the growth in GDP to have zero inflation, if the growth in money is less than the growth in GDP, then you have deflation, and if the growth in money exceeds that of the economy, then you have inflation. Which dovetails with, John Meynard Keynes theory of economic growth, if aggregate demand exceeds aggregate supply, you have growth, and of aggregate demand is less than aggregate supply, you have recession. He didn’t make a distinction between government demand and individual demand.
Aggregate demand is aggregate demand, no matter who is demanding the supply. Aggregate supply is the ability of the economy to supply that which is demanded. Therefore, the Federal Reserve raising interest rates to drive down aggregate demand, to match aggregate supply, is a fools errand. Since the government increases spending. Keeping aggregate demand higher than aggregate supply. Moreover, government spending doesn’t have the economic effect of individual spending. Economic growth is slowed by toxic government demand. Even as a dollar printed by government is more inflationary than one created by an entrepreneur. Because, a printed dollar comes into being out of nothing, while one created by economic growth, is backed by that growth. Even as taxes are a drag to economic growth.
The government can lie all they want, but anyone buying insurance, eating or driving knows it’s gone up closer to 100%. We all know it. The problem is, the people that receive the newly printed money get to use it, before it triggers inflation, so they have no problem with the government’s print and spend policy. In fact, they want more of it. Since they benefit. Societal wealth in the long term, however, is being hollowed out by their profligate taxing, printing and spending. Transferring demand from the people to the State lowers the efficiency of our economy, and increases the monetary base, far in access of GDP growth. So what we have are elites who benefit from rotting our economy from the core out. That’s why we have pernicious inflation. Government’s failed policies are creating it, as they always do.
Sincerely,
John Pepin
