The real causes of Inflation

Posted by LarryHeart 1 year ago to Economics
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Inflation of prices is a weasel phrase of the left. There is no such thing as "Inflation". It is deflation of the amount of debt the Federal Reserve note represents. Our currency is based on exchange of debts. A Fed Note was declared "Legal Tender" to be exchanged for the debt you owe for groceries or any other debt.
The government keeps issuing new debt notes to cover their spending. These new notes move the debt from your notes to the new ones.
So prices rise to EQUALIZE with the lesser value of the debt notes you hold.

E.g. let's say the price is 100 cents to buy an item. The government doubles the amount of notes so your "Dollar" note now represents only 50 cents of debt. The price is now two 50 cents "Dollar" Notes. Get it?

Why didn't we see so much inflation before? As production gets better prices fall. This allows equalization to the reduction of the debt in your notes without raising prices to equalize. Wages also rise but always much more slowly than debt stealing by the government. If the government borrows to much and production does not get better in pace to the falling prices and wage increases we get price increases.

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  • Posted by $ Abaco 1 year ago
    Haha..yep, Larry...This is deflation of the currency.

    I like to say that "inflation is a tax"...
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  • Posted by mshupe 1 year ago
    This is good. Rising prices in dollar terms is a different animal than monetary inflation. However, I think there's a better way to look at it. When the government floats more currency into the economy, it represents the confiscation of pre-existing wealth created by the private sector. Think of all money in circulation to be the aggregate of all wealth created and not already consumed. As stated, prices don't rise if productivity growth is sufficient to cover the government spending,
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  • Posted by mshupe 1 year ago in reply to this comment.
    That's really stupid. Nice job. An intelligent response would be for the federal government, all state governments, and a plurality of voters to adopt the same policy as that demonstrated by President Coolidge.
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  • Posted by mshupe 1 year ago in reply to this comment.
    Who is we? It's fair to say that government spending priorities are horribly destructive, but its important to know the nature of government spending. In all cases, it is the confiscation of wealth that had been produced by private enterprise. Whatever its supposed purpose, it is confiscation.
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  • Posted by freedomforall 1 year ago in reply to this comment.
    I'd just as soon see Hawaii released as a separate country. Maybe then they'd learn to survive on their own instead of being a left-socialist drain on producers on the mainland.
    As for Ukraine, let the Ukrainian residents decide by voting what they want to be - Russian, Ukrainian, or Free from both.
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  • Posted by $ 25n56il4 1 year ago
    If Biden would quit sending billions to Ukraine, we could possibly use that money. The people in Maui were given $700/family! This is scandalous when he is sending billions more to Ukraine right now. I do believe the Hawaiian Islands are part of America or did I miss something?
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