Dear Friends,
It seems to me, yesterday’s record inflation was brought to us by our elite. Most are of the opinion that the inflation is a result of the profligate money printing and monetizing the debt. While I agree that is a large factor, I believe the biggest cause was the shut downs, and the shortages they created. The US dollar is a special case. It is the world’s reserve currency and as such it is less susceptible to inflation by over printing than other currencies. Because other nations need the dollar to trade, the more trade the more dollars they need, and the central banks across the planet use the dollar as a reserve, often in place of gold and other precious metals. That is why I believe that the inflation we are now seeing, is the result of the lock downs and the shortages they created, even more than the profligate printing.
During the Wuhan flu panic the experts all agreed, or at least the experts we were allowed to hear from anyway, that the only rational course of action, to combat the flu… would be to shut down the economy, with certain sectors treated better or worse according to their political favor. That is why churches were closed but liqueur stores were not, mom and pop stores were shuttered but big box stores remained open, and while chain restaurants were let alone, private restaurants were closed, to protect the public from them. The asynchronous regulations were rationalized as closing “non essential” businesses. Whole industries were closed by edict, to protect the children, who are essentially immune. As it turns out, political favor is not an ideal criteria to judge the essentialness of a firm.
Things like gathering raw materials and other “non essential” industries were idled. In some countries for two years. You and I understand, if you create artificial shortages of primary inputs, by edict, then everything down the supply chain will be effected. Our ruling experts are too smart to understand such simple concepts though. Apparently they cannot fathom how it is possible that arbitrarily shutting down sectors of the economy, could create economic disruptions, leading to shortages, that cause inflation. Then the experts in their brilliance, chose to punish the people who worked through the pandemic, risking their lives and those of their loved ones, by forcing not only mask mandates but vaccine mandates as well. Stabbing the heroes in the back, with an untested biological agent… very progressive.
Even as our corporatist administration of experts were building shortages they were printing money to the tune of tens of trillions of dollars. The Federal Reserve has printed enough money since 2008, to make every native born man woman and child in the US, a millionaire. Obviously you and I didn’t get that largess. Instead, we got the bill… with inflation. That pile of money was divvied out to the richest people on the planet, national governments and corporations. Who mostly invested it driving down the rate of return on capital. Just part of the myriad of ways the elite steal money from us. Inflation takes it indirectly from our wealth, low return on investments steals the difference between what we should be getting and what we are… as well as bail ins next time the banks go belly up.
That is why I say that inflation is due to the stupidity of our ruling experts. Even as they created shortages, then flooded the economy with newly printed dollars, exacerbating those shortages, they create disruptions by edict with their mandates. Yesterday’s inflation numbers came in at 7.5% year over year. The US has not seen such inflation since the 1970s… and we haven’t seen the last of it. The expectation of inflation also drives inflation. With shortages still happening, supply lines undermined by mandates and protests against them, as well as the continued monetizing the debt, we can expect more of the same. Until the elite are replaced with rational and sane people, and the system repaired to prevent this in the future, it will go on, until it can no longer… then things will get bad.
Sincerely,
John Pepin
