DO WE KNOW WHAT CAUSES INFLATION
Does the increase of currency cause inflation, or is it indeed the real problem?
There is a misconception prevalent in America these days. It is predicated on the belief that, “the printing of new money, or increasing the amount of dollars in circulation, “may cause inflation.” Whether this misconception is deliberate, or incidental, is debatable. My belief is that a majority of people that hold this belief are products of the scheme, but the perpetrators of the scheme are malicious in their desire to plunder their fellow Americans.
I know that a whole realm of study has been developed, called “economics,” and that it revolves around principals of monetary manipulation. I recognize that many are fascinated by the field of economics. They are educated in economic theory, and I believe that it is precisely this education in economic theory that limits their understanding in this arena.
Most of us have heard the phrase, “he cannot see the forest for the trees.”
I, lovingly, and respectfully, challenge anyone to a debate on inflation. I believe that training in the instruments of economic management have caused many to loose track of basic, fundamental facts.
Why might I be making challenge? I assure you that it is not to demean, or criticize anyone. I am making this challenge in hopes that it will be brought to the realm of public discourse.
So if it is not for criticism, there must be another reason. It is because I believe that many intelligent, resourceful, well-meaning people have likewise been deceived, and that the deception is furthered daily as they share their understanding of economics with others. Each time that “economic theory” is explained publicly, incomplete, flawed concepts of economic management, allowing a public deception to be furthered.
Milton Friedman was indeed a brilliant man, and a talented communicator. He understood the cause and effect nature of economic management well, and was able to communicate it masterfully. But, that does not mean that he was always correct in his reasoning, and assessments.
True, the formula for his understanding of, “inflation,” is accurate, and it may be true that the relationship of currency to goods and services available, may be the actual definition of the word, “inflation,” but that is all insufficient to explain the drastic, and destructive effect of the, (printing of money without relationship to actual wealth.)
Currency is not wealth, it is merely a medium of exchange used to represent wealth for the purpose of exchanging it.
Most people find illustrations helpful, so I’ll present a couple of pertinent illustrations.
Inflation, as Friedman has explained it, is indeed effected by the creation of currency out of thin air, but it is only a byproduct, and a symptom of the real problem. It is true that if the value of our money is decreased, it will trigger a long line of deleterious consequences, but they all simply exacerbate the true problem, wealth has been stolen. These principal factors are only dominos, standing in line. The creation of unvalued currency is the finger that knocks over the 1st domino. All other dominos fall as the result of the push of that finger.
Let’s say that we I both have $1,000. We each have the equal purchasing power of $1,000 dollars, and can freely exercise that purchasing power according to free market trade principals. The ratio of currency to available goods and services does indeed effect the cost of these items, in a free market environment.
If you do not desire a certain item as much as I do, for whatever reason, you will not be as willing to expend your finite resources on it, effecting the price.
However, if someone, let’s say the US government were to steal 30% of your $1,000 dollars, leaving you with only $700, you would not be able to match my ability to pay for that which you desire.
The most important factor in the affordability of goods, and services would not be scarcity, but the lack of wealth, and the reason for that lack would be the theft committed against you.
Let me try something else. Consider this equation, 1/x. In this example,
“1” equals your share of the total wealth represented by US currency in circulation.
“X” equals the total wealth represented by the US currency in circulation.
When the denominator, or the “x” is increased, the numerator, or “1” is decreased. For instance, 1/2 is greater than 1/4. Just like that, every time the quantity of currency in circulation is increased, the value of each denomination of that currency is devalued. The worth of each dollar is not dependent upon any trade value factors, the numerator in the fraction, 1/2, is twice as large, twice as valuable as the numerator in, 1/4th, regardless of any other factors. It is a mathematical law.
Therefore, each time that the Federal Reserve increases the number of dollars in circulation, the wealth of every American who has labored to produce, has had the purchasing power of their dollars diminished, by a mathematically exact factor. The US government, by the instrument of the Federal Reserve, extracts that stolen value, and divides it up amongst themselves. They spend the stolen wealth as THEY see fit, with impunity, and you and I do without.
The ingenuity of American enterprise looks for new ways to overcome the stolen wealth, and that’s a good thing, but it does not change the fact that millions, billions, and now even trillions of dollars of legitimate American wealth has been out right stolen, and the Milton Friedman formula for “inflation” does not account for it, rather it has enabled it to go unnoticed.
I hope to be instrumental in shining light into this devious mechanism, used by dishonest politicians, and bankers, to extricate enormous amounts of wealth from the American people.
This is so simple it is constantly overlooked by many millions of Americans. They have, in many cases, been “educated” to overlook the simplest principal of economics. It’s basically like a shell game, “economics” scholars keep us so busy learning to understand the relativity of currency to wealth, that we loose track of the other hand removing ever increasing percentages of our wealth. This constant removal of wealth from the playing board, amounts to trillions of dollars of stolen wealth from unsuspecting Americans.
As intelligent, resourceful, “doers,” I hope the reader will be helpful to pass the word, and inform multitudes of Americans that they are participating in the theft of their own resources by ignorantly allowing this fraud to continue.
I would love to see this discussed in public fora, so we can all work together to educate a large swath of Americans on this manipulation of currency, and theft of their wealth by bankers, and our own elected politicians.
We all have opinions, and our opinions are usually based on some reasoning. If that reasoning is based on reliable things, like mathematical laws, those opinions will produce reliable results. If our opinions are based on faulty data, or incomplete assumptions, the results will be unreliable. Milton Friedman’s formula takes into account many contributing factors of economic stimuli, and reactions to those stimuli, but it ignores the root cause, and the most influential ingredient in the economic “pie,” the systematic theft of American wealth, by those that have been chosen to protect that wealth. This is a total miscarriage of justice, and I believe, the most egregious offense upon the American citizen’s economic wealth.
I believe that Americans could effect a great awareness of this existential threat to of the financial future of this great nation, by directly addressing this systematic theft of American wealth.
God bless you, Dave