You might say to me, after reading the above title: “What do you mean? Everyone knows that “inflation” is the general, and often quite rapid, rise in the costs we pay for goods and services.” Right? “A harsh reality of our economy for many decades.” Right? Sorry, but if you spread that “wrongthink”, which most of us have been taught our entire lives, you’ll be spreadingmisinformation!You’d be parroting deliberate lies and error from centers of obfuscation and deceit like The New York Times, The Washington Post, our sundry “alphabet” TV networks and cable “news” stations, with their disinformation-celebrating ‘talking heads”, most “social media” sites, and“our” U.S. Government! And for sure from those “Institutes of Induced Ignorance” known as “government schools.”
This is going to be a long and complex article, I’ll admit. To write it I’m going to refer to people who have written about “inflation”—what it really is and what causes it--to on line publications like “INVESTOPEDIA”--to writers from The New American Magazine that I trust: JOHN McMANUS, MICHAEL TENNANT, and former Congressman RON PAUL. They’re the experts, and I’ll borrow from their thoughts and some of their words in quoting freely from them. But they’re good teachers, and I’m learning also. Perhaps we all will.
EXACTLY WHAT IS “INFLATION”?
First off, let’s learn what “inflation” is NOT. Inflation is NOT the “gradual or rapid loss of purchasing power” that is manifested in a broad rise of prices we pay for goods and services over some period of time. THAT IS THE MAJOR SYMPTOM OF INFLATION—the major complaint that most of us have as we are required to pay MORE difficult to earn dollars for the same products or services than we paid at some earlier time. The RISING PRICES/COSTS are NOT the “inflation”, but are the result of “inflation”. “Inflation” of WHAT, you may ask? Something “our” government prefers that you not look too closely at, and what they’ve been doing for over a hundred years
Well, rising prices for things we buy means that EACH DOLLAR in circulation in our economy purchases fewer or less of whatever it is we are buying or, conversely, we have to pay MORE dollars to purchase the same product or service than we did previously. That seems obvious. That’s what most Americans inaccurately call “inflation”. But this loss of purchasing power by Americans, such as the extreme rise in prices we’ve all experienced over the past four years (and far more, all the way back to 1913), thanks to the reckless spending by the (mal)administration of Comrade Crooked Joe Biden and Comrade Caklin’ Commie-La and the “monetizing” of all that unconstitutional debt by that band of Globalist Gnomes who own (or at least CONTROL to their advantage and profit) the Federal Reserve Banking system (which is NOT “federal” nor does it have any “reserves”), has resulted in reduced economic growth—i.e. the “Gross Domestic Product has decreased in “real” value, while the U.S. Treasury, courtesy of the Federal Reserve, has greatly increased the U.S. money supply much faster than our economic system has grown, mostly to pay for the Demoncrat’s (and some pseudo-Republicans’) profligate spending.
Another way of putting it is “too much money chasing too few goods”, which ALWAYS drives up the prices we pay for goods and services. And need I remind you that ONLY the Federal Reserve Banking System has the authority today to regulate (increase or decrease) the money supply. The U.S. Congress relinquished that Constitutional mandate back in 1913 when they created the Federal Reserve monster (a PRIVATELY owned conglomeration of mega banks and ultra-wealthy and powerful “bankers” who control them).
ONLY THE FEDERAL RESERVE BANKING SYSTEM (ESTABLISHED IN 1913) CAN CHANGE THE SUPPLY OF MONEY (PAPER, FIAT DOLLARS) IN CIRCULATION.
Again, let’s recall what “inflation” actually is or is not. Remember: “INFLATION” IS THE INCREASE IN THE SUPPLY OF (in our case) UNBACKED FIAT DOLLARS out in our economy. More dollars in circulation to pay for the grossly increased and mostly wasteful and UNCONSTITUTIONAL spending by the Federal government means that each dollar is worth less and less, because there is not a corresponding identical increase in real “Gross Domestic Product”, i.e. MORE goods and services produced by the U.S. economy If prices rise by 10% but the GDP increases only 3%, the value of the amount of dollars in circulation we pay for the limited supply of products will go DOWN, and it will take MORE dollars to buy that limited supply of products.
Dr. Ron Paul said it well in an article in The New American magazine, July 22, 2024:
“Politicians could not increase the national debt unless the Federal Reserve monetizes the debt by purchasing Treasury bonds and increasing the money supply to keep interest rates low. The need to monetize the debt is the main reason the central bank (The FED) must keep interest rates from rising to anywhere near market levels. According to Manhattan Institute Senior Fellow Brian Riedl, every one percent increase in interest rates increases the federal interest payments by $35 TRILLION spread out over three decades”. NOW do you understand why it is imperative that Congress drastically cuts our federal spending IMMEDIATELY (if not sooner)?
Who increases the “supply” of dollars in circulation? It’s increased (mostly) or decreased constantly by the Federal Reserve (The FED), either by “printing” more dollars by the U.S. Treasury Dept., but mostly by a computer “book keeping” entry called “DIGITAL DEBITING”, where a vast amount of unbacked dollars are “created” out of thin air and then CREDITED at interest, by the various Federal Reserve Regional banks throughout the economy, to COMMERCIAL BANKS all over our nation. These commercial banks, the ones we all do business with, then loan out that “magically” created money to the economy as a whole, charging much higher interest to us than the FED charges them. (That, essentially, is when REAL MONEY—earned by individuals and businesses—is created).
“NOTHING “backs up” all of those dollars—no gold or silver or other appreciating assets—ONLY the “promises” of the U.S. Treasury Dept. back up our currency AND all of our nation’s debt (currently around $35 Trillion). Kind of “scary”, isn’t it?\. Supposedly the FED auctions off U.S. Treasury Dept. bonds and notes and treasury bills, etc. And while the FED doesn’t actually purchase U.S. Treasury debt, other private entities do (other banks, foreign governments, private domestic and foreign businesses, private individuals, etc.), ALL of who demand interest payments from the U.S. Treasury to them. And INTEREST on the U.S. National Debt now exceeds $1 TRILLION per year, the largest item in the budget except for Social Security/Medicare.
This, unfortunately, is contributing to the increased borrowing to maintain its profligate spending, by the U.S. government. Tax reductions, increased unemployment compensation or “pandemic” compensation, not balanced by increases in the GDP only increases the deficit and increases the need for new Federal “borrowing”. It’s a vicious circle that will never end UNLESS federal spending is greatly reduced and the gargantuan debt is reduced significantly, which is NOT likely (or until all sources of government income are exhausted and a final nation-destroying “crash” occurs—which seems far more likely.)
WHAT DOES OUR U.S. CONSTITUTION SAY ABOUT WHAT IS LAWFUL MONEY?
Our U.S. Constitution, in Article 1, Section 10, and part of Clause 1 says that “No State shall…make any Thing but gold and silver coin a Tender in Payment of Debts;….”. Obviously that requirement was negated long ago by the new Federal Reserve law in 1913 (and later). Currency backed by precious metals is very difficult to legally inflate because of reserve requirements. Even though unbacked “fiat” dollars are “legal” tender today, they are in direct contradiction to the Constitutional wisdom of our Founders, who knew the pitfalls that unbacked currencies issued by “central banks” could bring about. And since 1913 the American people have suffered many of those pitfalls (e.g. depression, multiple recessions, great increases in interest rates, and greatly INCREASED COSTS for the goods and services we buy) courtesy of our Non-Federal, privately owned Federal Reserve System.
And the inflation of dollars in circulation to pay for profligate (and in most cases unconstitutional) government spending is the DIRECT and planned for result right from the birth of the privately controlled Federal Reserve. Expanding the money supply to pay for undeclared wars, unconstitutional federal agencies, and unconstitutional and wasteful spending and giveaways to foreign nations and even to vast numbers of domestic freeloaders, has been all made possible by the Federal Reserve Central Bank, and all the while “our’ government is being charged huge amounts of “interest” to borrow money from other banks and investors, money that the FED created out of “thin air”. A “sweeter racket” would be difficult to conceive, don’t you think?
Supposedly the FED has NO private owners and is managed by a Board of Governors. But some entity (or entities) OWNS all of those assets and surely controls the decisions of the FED Board. Whoever or whatever really owns the Central Bank of the U.S.—(perhaps the mega-wealthy Rothchild, Rockefeller, Bush, and other globalist/internationalist minded families) owns the Federal Reserve (and it’s surely not the American people)—thus making the FED richer than the legendary King Midas, while all the while impoverishing Americans (AND the American Government) with DEBT SLAVERY via easy borrowing, easy credit; and endless “buy now and pay much later” schemes, especially when financing all of those “toys” to conduct the endless NO WIN and DEBT ENSLAVING WARS that the despicable Globalists love so much!
A few days ago I filled up a shopping cart at my local grocery store and checked out. I was prepared for a shock, and I wasn’t disappointed. That cart full of stuff cost a lot more than it used to cost Obviously our dollars don’t buy anywhere near as much today as they used to buy. I commented to another shopper in the checkout line that “groceries surly cost a lot more than they used to”. He surprised me by correctly observing that “our money doesn’t buy what it did only a short time ago.” I smiled and agreed with him. My cashier made the usual inaccurate comment that has been drummed into the brains of most Americans---that “inflation was causing the rising prices”. Of course she was technically wrong, because we should know by now that “rising prices” are the EFFECT of “inflation” of our domestic money supply—“our” Federal Reserve dollars.
As I write this, many of my fellow Americans, I’m assuming, agree with CACKLIN’ COMRADE COMMIE-LA, that it’s the fault of the super market owners, or the gas station owners, or the car dealerships, or our landlords or our utility companies, or any other “selfish” entity that sells goods or services and has been FORCED to increase the amount of dollars charged for those goods or services, especially since the “coronation” of the despicable BIDEN/HARRIS (Mal)Administraion. But they are WRONG to blame those who sell products or services—they are WRONG to accuse them of “price gouging” or “profiteering” or “excess markups”, etc.
And WHY ARE THEY WRONG? Because an ever increasing amount of unbacked fiat dollars is being pumped into our economy by the gnomes of globalism who control the Federal Reserve Banking system, to pay for a FINITE or even decreasing amount of products and services, thereby causing each unbacked dollar to be worth less! Too many dollars chasing too few products! Remember? Should the “Cacklin’ Commie-La” become our next POTUS (God forbid) and if she is true to her Marxist Mantra to impose “price controls” on our economy, get ready for the type of RUNAWAY INFLATION and FOOD SCARCITY that Germany experienced in the 1920’s, where a loaf of bread might cost $50,000 dollars. If you doubt me, you’d better start studying real history, because you’re pathetically uninformed!
Once upon a time the U.S.A. had an economic system based on honest, or “real” money. The U.S. Constitution gave Congress the power to regulate our monetary system, and mandated that only gold or silver would be “legal tender” and would back up the paper “Greenbacks” issued by the Treasury Dept. That was then---when honest money was in use in America. It had an honest value that Americans trusted, because those paper “Greenbacks” could be redeemed (traded in or sold to banks or investment entities) for, in Americans’ case, gold or silver coins or bullion. This was a common practice through most of Europe for centuries, and was an honest and accepted way to transfer or represent wealth. It was the system used in the U.S. until the (mal)administration of the Marxist/socialist, globalist and anti-Semite, President Franklin Roosevelt.
But with the advent of the Federal Reserve Act in 1913, pushed through to completion over a decade or so by those “Creatures From Jekyll Island” (as G. Edward Griffin called them)—the big money, super wealthy bankers, financiers, and industrialists—controlled by or members of mega-wealthy and powerful European and American families---who surely conspired together to get Congress to pass the Federal Reserve Act, which was passed and eagerly signed by President Woodrow Wilson in 1913---gold backing for our U.S. currency was discontinued (mostly in the early 1930’s), and silver backing was discontinued in the early 1970’a, courtesy of “Republican” President Richard Nixon.
Now our currency is backed by “moon beams” and by “Bidenomics” so beloved by our aspiring Demoncrat candidate for POTUS, Comrade Cacklin’ Commie-La, and can be INFLATED to their hearts’ desire by our central bankers and by our U.S. Treasury Dept. (which is often run by those “central bankers” and advocates of globalism and world government). Aren’t you reassured by that, especially by the fact that the number of U.S. dollars has, over that time, ballooned faster than little rabbits are born at a national rabbit convention?. I recall going shopping with my mother in the late 1940’s. She could get an entire shopping cart full of groceries and pay around $10 to $12 (and complain about “high prices” as I recall). What would they cost today, under “Bidenomics”? I know that you know.
Unless we’re virtually brain dead, or totally uncaring, we all know that, in the face of the swiftly deteriorating value of U.S. currency, Comrade Crooked Joe Biden and his band of Merry Marxists and our “wanna-be” POTUS, Comrade Cacklin’ Commie-La, have been pushing for, and getting Congress mostly to approve, multi-trillion dollar “Continuing Resolution” budgets to try to bribe (oops—I mean convince) the voters to latch onto their latest pet big spending boondoggles. The costs increase significantly each year. But while Crooked Joe and Cacklin’ Commie-La plan to increase spending into infinity, it would appear, we MUST ask our elected representatives (the ones who seem to care) just from WHERE will the federal government get the money? Comrade Biden’s usual trite answer is to tell us that he’ll get Congress to raise taxes on the wealthy—to “pay their fare share”. Cacklin’ Commie-La usually concurs with that “brilliance”, when she can state a coherent and rational thought. But there are NOT enough wealthy people on the planet to pay those astronomical sums. I assume you know that, if Biden/Harris, or, God forbid, Harris/Walz are not defeated and stopped, MOST of the increased spending on Demoncrat boondoggles will be obtained by the use of more and more and more PAPER, UNBACKED DOLLARS! Which will result in ever-increasing costs for goods and services, and especially for INTEREST payments, until the nation collapses into ungovernableness or until the people REVOLT!
I’d like to end this discussion by quoting from an article written by one of my heroes, the late John McManus, and published in The New American magazine on June 9, 2024:
“Noted economists and historians have warned about the predictable
results of inflation. England’s John Maynard Keynes said: ‘The pro-
cess engages all the hidden forces of economic law on the side of
destruction.’
“America’s Henry Hazlitt said of inflation: ‘It leads men to
demand totalitarian controls.’
“U.S. historian William Shirer pointed to Germany in the early
1920’s where inflation had destroyed the German Deucthmark.’”
For their entire (mal)administration, the BIDEN/HARRIS duo of big spenders and mental incompetents proposed “plans (that) called for massive creation of totally unbacked dollars” in order to pay for it’s reckless and out-of-control and almost entirely UNCONSTITUTIONAL spending. If elected by gullible and uncaring Americans, the HARRIS/WALZ Marxist administration will complete the long time globalist/Marxist goal of destroying the Constitutional Republic of the U.S. because America entered upon a fatal path to self-destruction.
A similar fate befell the ancient Roman Empire. In the early years of the Roman Republic, its main coinage was the “denarius”, which contained 4.5 grams of silver. After 400 to 500 years, the “denarius” had virtually no silver, and its quantity in circulation throughout the Empire vastly increased. In effect, the Romans devalued their currency (they didn’t use paper currency) by greatly increasing the amount of their money in circulation and virtually decreasing its individual coin’s value. The same as the Federal Reserve is doing with our U.S. dollars. Rome swiftly went down hill and eventually was overrun by hordes of invading “aliens” seeking “the good life” and loot. Are we Americans facing the same fate? Hmmmm?
As an ancient Roman near the end of the Empire might have observed: “Nimis multi denari feruntur, nec satis res ad emendum! That is: Too many denari in circulation and not enough things to buy! They lost their country, their freedom, and their lives. What will we Americans lose?