One of the most dishonest games being played in economics these days is the attempt by numerous groups (political and financial) to deflect blame for that rise of inflation.
The particular Biden White House and Democrats desperately want to blame Russia and the war in Ukraine, even though inflation was spiking long before the war ever started. The Federal Reserve pretended for years that will inflation was not a threat at all despite numerous option economists warning what happens. Now they blame supply chain disruptions instead of their own monetary policies. The GOP wants to blame Biden alone for the crisis while disregarding the dominant role of the Fed in the economy (and their unilateral power) over the course of several presidencies.
In the alternative sphere there are some people that try to deny the fact that there is more than one type of inflation. They would like to claim it’s all about cash creation, but this is simply not true. There is inflation within money supply, but there is also price inflation caused by numerous factors including bottlenecks in production, bottlenecks in assets, bottlenecks in shipping, bottlenecks in energy, etc . Anyone that denies this fact is blinded by bias or just will not understand how inflation really works.
Overall, it’s reasonable according to the evidence to put The majority of the blame on the central banks and their 14 season program of bailouts plus QE policies. If you have read my previous content articles on the Fed’s involvement you know that my position has remained the same for years – I predicted a stagflationary crisis in line with the position that that the Given was deliberately creating a financial disaster to make way for a new digital currency system associated with a global framework, and this is precisely what has happened up to now.
That said, too much money chasing too few goods is not the only problem we face as a nation. There is also the issue of global interdependency and the reliance on other nations, some of them hostile, for production and resources. With supply chain disruptions an ever present danger, it’s not enough to focus on money velocity and the central bank alone – We won’t be solving the particular crisis that way.
Not to mention, the more the government reserve raises interest rates the greater it costs to support ALL OF US government debt, which is currently well beyond US GROSS DOMESTIC PRODUCT. If doubts rise within the US being unable to buy its treasury debts, after that foreign creditors may get rid of their T-bond and dollar holding entirely. This could destroy the buying power from the dollar.
Within the liberty movement there is always discussion about solutions. We all seem to agree on the core difficulties but can’t ever seem to agree with what to do about them.
There are those that suggest irritating that can be done economically except get ready and wait for collapse so we can rebuild once the dirt has settled. I find myself in this camp more often than not. Then there are those that believe a political approach can be done. After nearly half the particular states in the US blocked the particular covid mandates and lockdowns, I am starting to think solutions at the state level might be viable. Then there are those that want to build an alternative program, a parallel economy that will competes with the mainstream economy.
This is some thing I have discussed for a long time – It’s the reason I started Alt-Market 12 years ago. It’s the ideal solution because it is positive. Instead of waiting around for others to fix the crisis for us, regular people simply establish their own trade and production systems based on necessities, separating from the dying economy so that when it collapses they are mostly not affected.
This, however , is a short term solution in that large scale domestic creation is eventually needed to return a country and economy to greater prosperity. Expanding gardens, making trade products and forming local barter markets is only a way to climate the storm; it is not a long path to fiscal health. What we should need is locally based big scale production of essentials as well as our own domestic reference discovery.
In order to fight back against monetary decrease the US needs to produce a most of its own goods again. If the problem is too much money chasing not enough goods, then we can create our own goods here at house instead of relying on countries like China and the unstable worldwide supply chain.
But what if there is an answer beyond domestic production alone? What if we built an economy which focuses on HIGH QUALITY? It’s a notion that might have been suggested by others, however it is certainly not being promoted by any economist within the mainstream or any political consultant.
The standard Economy As A Means To Battle Inflation?
Consider this for a moment: Imagine if home based producers were given bonuses by states (such as a jubilee on taxes) to manufacture high quality long lasting goods? There are multiple reasons why this model is not being used, every one of them faulty.
Carbon control initiatives in the west are actually forcing companies to produce reduce quality goods with low quality designs in the name of “ conserving the environment. ” But , in case products are low quality and they are breaking sooner because of carbon control standards, then individuals have to go out and buy alternative goods sooner. More store demand means more manufacturing which means more “ carbon pollution” over time. The carbon emissions narrative is comprehensive nonsense and there’s no proof whatsoever that man-made co2 causes climate change, but even by the logic of the carbon lobby quality production makes more sense for that environment. At the very least it means much less waste.
Remember when a washing machine used to final for many years? Remember when a lawnmower or a chainsaw was crafted from quality metal parts instead of being loaded with plastic parts? Remember how grandma acquired the same working vacuum for decades? Quality used to be a thing, but the idea has been erased from modern economic theory.
Today, it’s all about quantity, because quantity makes a bigger profit (as long as prices remain lower and people have the money to buy multiples of an item). If items break constantly it means they need to be replaced constantly, which means companies make more money. In fact , there are many companies that deliberately design products to break quickly so that customers must buy another. This method does not work in an inflationary atmosphere; it actually adds to the problem by forcing more money velocity and reducing the number of useful goods in the system.
Let’s say that instead we had numerous manufacturers that will operate within the US and they are offered a tax jubilee for as long as they are willing to create high quality long lasting models of their products. With the tax incentives, they can market such goods at a lower price in order to compete with poor quality goods from places like China. Now, you have given the public access to items that these people only need to replace every five years, or 10 years, rather than every 12 months.
But what about food, which is a major part of the inflation problem? Well, the federal government actually pays farmers to grow LESS food in order to keep prices higher on commodities markets. Why not just stop doing that? Or, again, states could offer tax incentives to farmers that produce with the energy to drive down prices, and state governments could offer to buy excess long term foods like wheat as a kind of strategic reserve. America i did so this; why don’t we do it any more?
And how regarding housing? Simple – Ban foreign purchases of real estate and only allow American citizens to buy American land. American citizens have a right to private property beneath the constitution. Foreign investors and governments do not have that right.
The goal of all these policies would be to free up supply without killing the purchasing power of the dollar and without deliberately crushing credit markets and triggering mass job losses.
In this environment money velocity decelerates and there are more goods on the market because they last longer. Cost savings go up because people don’t need to spend as often. Prices generally start to go down. Inflation is usually subdued and eventually defeated, because what is money other than a quick way to provide necessities and facilities? If those goods last longer then money becomes less relevant to the health of the economic climate.
What about deflation? Would high quality production lead to far less sales and a big drop in jobs? In America’s present 70% service-based economy, yes, for a time. But , this is going to happen soon in any case as the Fed hikes prices and stifles access to credit score. With my strategy, service jobs would be changed over time for better paying manufacturing and engineering work.
To be sure, there is the argument that quality goods and more savings can result in decadent spending. In other words, you have the theory that the more money people have the more they will spend on frivolity and this might keep inflation alive. The problem is we have not lived in an economy depending on quality for several decades, so it’s hard to say how people will react. If people have long lasting items and are safe in their basic necessities, then what is compelling them to spend with wild abandon? Not much.
The institution would like to keep the public influenced by the system by reducing our buying power and managing access to goods. I think that they will one day offer the exact same kind of solution – A positive return to quality. But just at the price of subservience. The World Economic Forum’s “ Shared Economy” idea which they obviously plan to introduce after there exists a major financial collapse would require quality based manufacturing, other wise it would fail miserably. If everyone on the planet is going to be sharing everything and private property is outlawed, then the goods that are contributed would have to be designed to last.
My recommendation is that we circumvent the particular establishment entirely and create our own economic model, still based in private property but also modified to quality production. Plus, we manufacture all our own goods locally within our very own states and our own nation. I believe this would end pumpiing, not just today, but for in history.
Will the establishment allow such a program to thrive? They would certainly try to stop it from happening making use of any means they have available. Decentralization and abundance are the enemies of authoritarianism. My point is, there is indeed a solution. We avoid need Fed intervention. All of us don’t need sky high interest rates. We don’t need stimulation. We don’t need federal government oppression or foreign surgery. We don’t need globalist centralization or a Great Reset. We don’t need any one of it. They will try to convince you that we do.
Regardless of what happens the public must be made aware that there is a better way.