The insidious nature of debasing the currency (inflation)

James Hickman, over at Schiff Sovereign, recently published several good commentaries for Grey Swan (Paradigm et al) regarding inflation, stagflation, and the financial mess both old parties and both Trumpistas and NeverTrumpers have gotten the States into, for the last 9 years.

We all know that Trump is not telling the truth about inflation. He apparently believes the phony numbers that the various federal agencies and Wall Street “geniuses” are pushing. Yes, gasoline (and even Diesel) prices are down, but not as much as he is telling us and the press. Yes, prices between $2.10 and $2.50 across much of the Heartland and South are good news. But prices on everything else are continuing to go up (and stay high) after the disastrous actions of Uncle Joe’s regime. And The Donald is not doing – and not able – to do very much.

Of course, the problem is that we are not only NOT on a real standard – gold or silver, for example. We are far, far beyond the debasing of the coin that Hickman wrote about in the 1400s in England, and that plagued the SPQR (Rome) and hundreds of regimes throughout history. We are well beyond the crazy behavior that generated trillion “dollar” bills in Zimbabwe or wheelbarrows full of paper in the Weimar Republic. Thanks to a combination of actual printing presses and debt-based money and electronic creation of imaginary funds, we are inflating prices with a skill and generally a rapidity not ever found in history.

And we know it – go inside that convenience store that currently sells $2.889 unleaded regular (10% ethanol) and look at the prices on the shelves and the products. Remember what they sold for six months ago? A year ago? Got to a local Kroger’s or Safeway and take an old sales flier from a year or two ago (or look up the email you got) and see how the “sales” price today is higher than the “regular” price as recently as fifteen or twenty weeks ago.

And of course, we can go online and look at the six- and twelve-month charts, the five- and ten-year graphs for the prices of gold, silver, copper, even aluminum. Prepare to pull your hair out: they are very ugly pictures.

And it isn’t just inflation, it is stagflation and shrinkflation: what was sold a year ago that was a half-gallon (64-ounce) is now a mere 52-ounce today. A one-pound (16-ounce package of lunchmeat or kilpasa is now a 14-ounce, or even just 12-ounces. And when did your paycheck go up last? Even those on retirement (Social Security, military, etc.) see upcoming increases of 2.5 percent or so. But prices? 10% if we’re lucky, but often 20, 25, or 30% is common.

Recent elections in various States and localities saw voters stupidly increasing tax burdens on themselves by 5, 10 or 20%. Yeah, it is often claimed to be “on the wealthy” but we know the truth is much different than the brainwashing advertisements.

Folks, it not that gold or silver – or even rare earths – are worth more today. Nor is it true that supply of these things is falling off so that the market drives the prices up. No, it is that the stinkin’ FRN (Federal Reserve Note) is worth less and less. $4000/ounce gold weighs the same, and pretty much buys the same, as the 1930-vintage $20/ounce gold. Priced a good suit recently? Or a good automatic pistol?

Three dollar a gallon gas, in 1970 dollars, would not even be 10 cents a gallon: maybe five-cent. Admittedly worse for the vehicle, worse for air quality, and worse for health. Even a $2/bottle (16.9 ounce) is cheaper in real money (and time to earn the money) than the traditional 5-cent Coke (5.5 ounce, glass bottle) from 1970.

The problem? Trillions of dollars of deficit spending by government paid for by massive borrowing and accounting games and tricks. And not just the FedGov: States and cities and other government entities all do this. There is more and more demand for goods and services paid for by creating massive amounts of money out of thin air. This is very much, in our opinion, exactly the situation Hickman refers to in ancient England.

And unless we can stop it, we, the people of these States, will suffer much the same as the people of the Kingdom of England endured centuries ago.

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