Inflation

From Conservapedia
As inflation ravaged America after the 2020 Socialist putsch, consumers revolted.

In economics, Inflation is an increase in the money supply in excess of the quantity of goods and services being produced. Inflation is not caused by global warming or any natural phenomena. Inflation is caused directly by the people whom voters elect to office. By inflating the money supply, the U.S. Congress is attempting to monetize and devalue its debt for past deficit spending. Biden's $1.9 trillion Covid boondoggle caused inflation to spike to its highest level in 40 years.[1]

Inflation robs workers of the wealth, the value of their labor, discourages savings, investment, and capital accumulation. Inflation creates panic buying, as workers spend their paychecks quickly before their money loses any more value. Inflation is a hallmark of Socialism.

High inflation undermines the economy's ability to generate long-lasting growth and job creation. High inflation erodes the value of incomes and savings. People on fixed incomes, including the elderly and poor are particularly vulnerable to inflation. Social Security payments are adjusted to inflation months or years after the fact and typically when inflation has already accelerated to higher levels.

Inflation is caused when a government's appetite for spending on popular vote buying schemes exceeds its budget, flooding the country with excess currency, and leading to a general rise in the price level of a limited supply of goods and services. When businesses pass along their costs to consumers in order to remain in business, Marxists blame the "greedy" businessman rather than their statist allies in government who authorized the spending. One of the primary purposes of an inflationary policy is to foment class warfare, pitting citizens against citizens, rather than holding politicians responsible for the decline in living standards for which they hope to benefit by authorizing more inflation and another round of social spending. Under the socialist Biden regime and its transition to a socialist economy, inflation reached a 40 year high during its first 10 months with no end in sight.[2]

Monetary theory[edit]

To hold prices stable in a growing economy, the amount of currency in circulation should be held commensurate with the net rate of growth of new workers entering the labor force, which itself is a function of population growth.[3] Inflation occurs when a country is flooded with currency in excess of its growing population, and hence, its economic growth. In a country with a declining population, a similar phenomenon can occur if the amount of currency in circulation remains high as the number of workers and consumers declines.

If for example money supply growth were held flat within a growing population, new workers would find it difficult to find jobs, let alone receive money compensation in new paychecks, or to find living quarters and other basic necessities. Hence the necessity to regulate money growth in tandem with the number of new workers entering the labor force. The growing labor force will create the new housing and other necessities to sustain itself. Inflation occurs when corrupt politicians flood the country with "free money" to buy votes for themselves.

Inflation is caused when the money supply becomes bloated, or inflated, in proportion to the amount of goods and services being produced, or capable of being produced, in the national economy. Bloated federal budgets is the cause of a bloated money supply, with the Treasury Department and Federal Reserve issuing more demand notes to meet new federal spending.

Simple supply and demand[edit]

Currency, or what many refer to as money, are called "demand notes" - notes that can be presented as demand for goods and services. Demand notes, in theory, represent the demand for good and services.

In an inflationary scenario, the supply of goods and services available is relatively stable, whereas excess demand notes in circulation can lead to shortages and empty shelves. Inflationary proponents argue this is a good thing, leading to demand for more jobs to produce more goods and services. However, history and experience teaches it is more like placing an entire society on a hamster wheel with a few winners and a lot of losers. Inflation not only destroys savings, it has psychological effects to think only in the short term. Inflation makes long term planning futile and destroys the incentive to save money, which is necessary for job creation in a healthy environment.

Hyperinflation[edit]

A wheelbarrow full of printed currency during the Weimar Republic.

Hyperinflation is out of control inflation and has occurred when there is a massive imbalance between the supply and demand and a complete loss of confidence in the currency. Currency is still being printed in large quantities without a corresponding increase in the amount of goods and services available. It has occurred when price controls are dropped by central governments, like in the economic collapse of the USSR, where inflation reached over 1000% in some areas.[4] Price controls have always proven to be an ineffective, if not disastrous response.

The worst episodes of hyperinflation historically have been in Weimar Germany in 1923 (after World War I), Hungary and China after World War II, Chile under Salvador Allende, and Zimbabwe in the late 2000s.

At the peak of the inflationary cycle during the Weimar Republic, workers were paid twice daily in wheelbarrows. Currency was rubber-stamped with extra zeros because new currency could not be printed fast enough. In 2022, German Reichmarks ranging from half a million to 100 million marks were still listed on ebay for 1 U.S. cent.[5] At 1 cent in U.S. currency, adjusted for inflation, the intrinsic and numismatic value was probably overpriced even for collectors, given the original quantity issued and still available for purchasers after World War II.

Disincentive to savings[edit]

Inflation causes ordinary people to quit saving for two reasons: (1) the return on savings is nowhere near the loss in value of their money had they spent the money rather than invest; (2) ordinary survival skills make it impossible for some people to save money, having to concentrate on the bare necessities. The longterm effects are both devastating and permanent, as people quit saving for a home down payment, or a child's education, for example.

Inflation, and government so-called "stimulus" programs, which fuel inflation, have a destructive impact on job creation and future economic growth. National savings is the sum total of all savings held in U.S. banks, and is the pool of money that banks lend out for job creation. When national savings dry up, it becomes impossible to lend money for startup businesses to create jobs for a growing population (alternatively, foreign investment, or foreign companies buying up U.S. companies or expanding their operations in the United States, can make up the difference and has made up the difference in the United States in recent decades. Americans being indebted and beholden to foreign corporations and governments brings its own set of problems).

Political instability[edit]

In some societies, political decisions control the supply of currency. If a fiat currency is devalued due to an increase in the total money supply, inflation will result.

To an able-bodied person living on the dole with automatic "cost of living increases," the rate of inflation makes no difference. Whereas to a worker, saddled with the cost of supporting everyone who receives government support or subsidies, the dollar value of their labor to support themselves diminishes in real time.

A drug-addicted thief, for example, having invested nothing in terms of time and labor to acquire the item or commodity they steal, the value of the item or commodity means nothing other than the amount of illegal drugs the item or commodity can be exchanged for. Whereas to a worker, they must calculate exactly how many hours they must labor to afford a car payment in order to drive to work. Inflation diminsihes the value of their labor, and increase the number of hours the worker must spend on the job to afford the car payment, and diminishes so-called "discretionary spending".

Psychological damage[edit]

Inflation causes psychological damage, beginning with a loss of confidence in money, then loss of trust in government which usually responds by printing more money to buy back the sympathy of voters, loss of trust between citizens who feel everyone is out to cheat them, and a loss of confidence in people themselves who begin to feel their ambitions can never fulfill their hopes and dreams.

Measures of inflation[edit]

For a more detailed treatment, see consumer price index.

The common measure for consumers formerly was the Consumer Price Index (CPI). Economists prefer a broader measure, the "implicit GDP deflator", which includes the prices of non-consumer items like highways and factories.

The CPI reflects changes in the price of a representative "basket" of goods and services sold:

The inflation rate is expressed as a percentage increase in average prices over a year. For example, if the cost of the CPI "basket" rises from $100 one year ago to $110 today, the current inflation rate is 10 per cent. When the CPI rises, the purchasing power of currency and value of a worker's labor falls.[6]

Quotes on Inflation[edit]

Joeflation[edit]

During Joe Biden's term, the spike in inflation was especially hard towards 2021 Thanksgiving day, most Americans affected, polled, blamed Biden.

Great Reset[edit]

Russian President Vladimir Putin offered his explanation for the inflation that racked global economies in 2022:

"Surging inflation in product and commodity markets had become a fact of life long before the events of this year. The world has been driven into this situation, little by little, by many years of irresponsible macroeconomic policies pursued by the G7 countries, including uncontrolled emission and accumulation of unsecured debt. These processes intensified with the onset of the coronavirus pandemic in 2020, when supply and demand for goods and services drastically fell on a global scale.

This begs the question: what does our military operation in Donbass have to do with this? Nothing whatsoever.

Because they could not or would not devise any other recipes, the governments of the leading Western economies simply accelerated their money-printing machines. Such a simple way to make up for unprecedented budget deficits.

I have already cited this figure: over the past two years, the money supply in the United States has grown by more than 38 percent. Previously, a similar rise took decades, but now it grew by 38 percent or 5.9 trillion dollars in two years. By comparison, only a few countries have a bigger gross domestic product.

The EU's money supply has also increased dramatically over this period. It grew by about 20 percent, or 2.5 trillion euros.

Lately, I have been hearing more and more about the so-called – please excuse me, I really would not like to do this here, even mention my own name in this regard, but I cannot help it – we all hear about the so-called ‘Putin inflation’ in the West. When I see this, I wonder who they expect would buy this nonsense – people who cannot read or write, maybe. Anyone literate enough to read would understand what is actually happening.

Russia, our actions to liberate Donbass have absolutely nothing to do with this. The rising prices, accelerating inflation, shortages of food and fuel, petrol, and problems in the energy sector are the result of system-wide errors the current US administration and European bureaucracy have made in their economic policies. That is where the reasons are, and only there.

I will mention our operation, too: yes, it could have contributed to the trend, but the root cause is precisely this – their erroneous economic policies. In fact, the operation we launched in Donbass is a lifeline they are grabbing at to be able to blame their own miscalculations on others, in this case, on Russia. But everyone who has at least completed primary school would understand the true reasons for today's situation.

So, they printed more money, and then what? Where did all that money go? It was obviously used to pay for goods and services outside Western countries – this is where the newly-printed money flowed. They literally began to clean out, to wipe out global markets. Naturally, no one thought about the interests of other states, including the poorest ones. They were left with scraps, as they say, and even that at exorbitant prices.

While at the end of 2019, imports of goods to the United States amounted to about 250 billion dollars a month, by now, it has grown to 350 billion. It is noteworthy that the growth was 40 percent – exactly in proportion to the unsecured money supply printed in recent years. They printed and distributed money, and used it to wipe out goods from third countries’ markets.

This is what I would like to add. For a long time, the United States was a big food supplier in the world market. It was proud, and with good reason, of its achievements, its agriculture and farming traditions. By the way, this is an example for many of us, too. But today, America’s role has changed drastically. It has turned from a net exporter of food into a net importer. Loosely speaking, it is printing money and pulling commodity flows its way, buying food products all over the world.

The European Union is building up imports even faster. Obviously, such a sharp increase in demand that is not covered by the supply of goods has triggered a wave of shortages and global inflation. This is where this global inflation originates.

See also[edit]

References[edit]

  1. ↑ https://www.msn.com/en-us/money/markets/biden-e2-80-99s-2419-trillion-win-on-covid-aid-hobbles-rest-of-agenda/ar-AAUpZ42
  2. ↑ Mark Moore, "More than 75% of US hit by inflation and most blame Biden, poll shows," NYPost, Nov 24, 2021
  3. ↑ both natural increase and by immigration.
  4. ↑ [1] Inflation Indicators Ukraine
  5. ↑ https://www.ebay.com/itm/115168335171?hash=item1ad0915543:g:WQQAAOSw3MJh02jk
  6. ↑ Wanniski, Jude. "Money and Tax Rates." In Wanniski. The Way the World Works. 1978.

External links[edit]

Categories: [Inflation]

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