Written by Jeff Nielson Monday, 28 October 2013 13:01
Low inflation is not good for the economy because very low inflation increases the risks of deflation, which can cause an economy to stagnate. The evidence is that falling and low inflation can be very bad for an economy.
- B.S. Bernanke, Chairman of the Federal Reserve, October 2013
The economic Revisionism above is arguably the most-evil lie being propagated in the world today. While there are numerous ways to demonstrate the economic perversions implicit in this falsehood, let’s start with one point. The Bankers who continually tell us how “good” inflation is for us never define what they mean by “inflation”.
As regular readers know; definition of terms is the starting point of all legitimate analysis. If you want your audience to understand your argument; first (obviously) you have to ensure that the audience actually comprehends the terminology which you are using.
Conversely, Con-Men have a precisely opposite modus operandi. They deliberately use terms which are poorly-defined/poorly-understood, because when doing so it’s much easier to trick and scam people. In merely explicitly defining inflation; we can reveal these banker Con-Men as the malevolent thieves which some know them to be.
Inflation (in the simplest terms) is the speed at which our money loses its value. This definition is easily proven with empirical evidence. When you go to the supermarket to buy a dozen eggs, and those eggs cost 10% (or 20%) more than they did six months ago, the eggs haven’t changed – in either quantity or quality. It is your money which has lost 10% of its value over that six-month period.
Obviously anyone with a functional mind knows that it is not “good” for our money to relentlessly lose its value; every minute of every day, every day of every month, every month of every year. Who wants the paycheque which they work so hard to earn to shrink (in actual purchasing-power) every time their receive a new one?
Our governments understand this. This is why they not only conceal the nature of inflation, they also lie about its magnitude. A particularly flagrant example of this constant lying occurred in July of last year, and has been cited in many previous commentaries.
In the same month that the World Bank was warning that global food-inflation was increasing at an annualized rate of over 100%, and governments in Asia were having an emergency-summit about this global “food-price shock”; the U.S. government was reporting (as its “broadest measurement” of inflation) a rate of literally 0%.
Assuming that the entire (gluttonous) U.S. population didn’t all stop eating for that entire month; the inflation number reported by the U.S. government that month (in this era of “globalization”) wasn’t simply a lie, it was an enormous lie. But as has been explained to readers previously; the Inflation Lie is a multi-purpose lie.
One of its primary purposes can be seen below: deceiving the Little People (the bottom-80% of the population) so that they don’t realize the speed/extent at which their paycheques have been destroyed.
Written by Jeff Nielson Thursday, 24 October 2013 13:25
Hyperinflation is an insidious, economic killer. It inevitably (but insanely) creeps up on its Victims in plain sight, before decimating them with an always unexpected ambush. How can one of the most-obvious of all economic phenomena always end up as a “surprise”?
Because none of the Victims ever believe that hyperinflation is possible. Point out that the U.S. dollar has lost 98% of its value in the 100 years that the Federal Reserve has been responsible for preserving its value, and people will yawn – it’s old news. But then assert that it is about to lose the last 2% of that value, and (amazingly) the response will be laughter and/or derision.
Look at a chart showing a 98% decline in anything, and the expectation will be that the last 2% is also about to be lost. Or, in market vernacular; “the Trend is your friend.” It is irrational, bordering on insane to expect such a chart to reverse itself, or even stabilize. Indeed, it is charts of this nature which spawned the expression “past the point of no return.”
Yet when people look at charts of currencies, in this case worthless paper currencies; the mere suggestion that a currency could go to zero is a concept literally beyond the comprehension of nearly all of our populations. If a person finds it impossible to conceptually conceive of lions, then a lion could simply walk up and eat that person.
We will not/cannot protect ourselves from a “risk” which we do not believe to be within the realm of possibility. One does not take precautions to protect themselves from the “risk” of man-eating butterflies, or killer-bunnies. Thus is hyperinflation perceived by the masses: the Threat of the Killer-Bunnie.
In less-extreme forms; the inability to acknowledge/accept (obvious) reality could be described as “normalcy bias”. Because almost all Change (even large changes) is impossible to perceive in real-time; it is a common human intellectual flaw to expect tomorrow to be like today (or yesterday). A tomorrow which is not like either today or yesterday is not perceived to be within the realm of possibility.
However, with respect to hyperinflation we are not dealing with mere Normalcy Bias, but rather its substantially more-extreme cousin: Cultural Insanity. There are several empirical reasons for reaching this more dramatic diagnosis.
Obviously hyperinflation is not a Killer-Bunnie. There are numerous, documented historical examples of this economic killer. There is a very recent historical example (the Zimbabwe dollar), and there are several extremely obvious examples of hyperinflation currently in progress (Western, paper currencies).
It is normal/sane not to believe in the existence of Killer-Bunnies, unless one has read about people being devoured by Killer-Bunnies, has watched Killer-Bunnies devouring people, and is watching Killer-Bunnies devouring people. In such a reality; it would be insane not to believe in something which can (easily) be empirically perceived.
Regular readers have seen the chart below on the U.S. dollar on numerous occasions. It clearly and unequivocally depicts a hyperinflation-in-progress: a vertical line as supply (of U.S. dollars) goes to infinity. It is a fact of mathematics/economics that as the supply of anything goes to infinity its price must go to zero.
But readers will no longer see this chart in the future (unless one chooses to use an older version), because it no longer exists. Meet the new-and-improved version of this chart of the U.S. monetary base from the Federal Reserve.