Asset Price Inflation Was Still Inflation, Now That Consumer Price Is Here Via The War on Fossil Fuels, The People Seek An Easy Answer From The Central Bank (Price Controls and Fossil Fuels) – December 22, 2022,
It’s been popular culture amongst those of us interested in financials and economics to blame everything on the central banks. The only public figures I know of to challenge the narrative of pointing the blame squarely at the central banks are Jeff Snider and Robert T. Kiyosaki, who has always preached Financial Education.
Allow me to point out that I’m not 100% aligned with Robert Kiyosaki or Jeff Snider; these talented men have their own views, and they’re very successful with those views; I just like Snider and Kiyosaki have my own view.
I believe that financial and economic blame should be pointed at our outdated democratic systems. People who contribute little to nothing to the country can use the FEDERAL government to steal on their behalf. People who contribute nothing to society can even imagine wind turbines and solar panels can do things they were not designed to do.
Let’s imagine that the petrodollar is not a real thing; well, then, how do you value fiat money? Why did the U.S. go out of its way to cut deals with the Saudis and OPEC+ countries? I argue this is because oil or petrol is involved in some way, shape, or form in almost every transaction in the world.
Now, if the U.S. puts its stamp of approval and decides it will protect its petrol interests, you can see how over time, the petrodollar can have a mind of its own.
Now, if Progressives want to disrupt this relationship, that’s fine, but understand that there are consequences to doing this. I think it would be wise to have an alternative to fossil fuels ready before declaring war on it, but that’s just me; maybe the central planners know something I don’t; I’m okay with that also.
What does annoy me is the central bank bashing; the main reason the central bank still stands is that a lot of people vote for politicians who have a PRICE CONTROL agenda. Bernie Sanders almost became President of the United States, and he wanted to raise the FEDERAL minimum wage to what he thought was a liveable wage.
If you like Bernie Sanders, that’s fine, but the minimum wage is a PRICE CONTROL, and if you’re voting for the government to control prices, you are declaring a new value for money to price waged labor, meaning that it will be ILLEGAL for an employer to price labor below that amount. This also means that the price to drill for oil must price based at the new FEDERAL minimum wage, which not seem complicated until you give it some thought.
Supposed an oil driller made $30 per hour prior, but now the STARTING wage to flip burgers is $15 an hour; also imagine that the oil driller also has a labor union that demands their clients can pay raise that keeps up with the inflation rate that the union decided on PRIOR to the Bernie Sanders minimum wage hike?
Price controls are extremely problematic, and although I’m picking on Bernie Sanders, there are all sorts of price controls that existed long before Bernie Sanders got into politics. Now, because it is ILLEGAL to pay employees below the minimum wage, instead of adjusting wages when the economy deflates, employers start FIRING people.
The government makes most of its money via the FEDERAL income tax, and if layoffs start happening in the PRIVATE sector, the government will get less revenue. For myself, it’s pretty apparent what’s causing consumer price inflation, but I want to know why nobody was complaining when there was asset price inflation.
Why is it that asset price inflation wasn’t considered inflation? I don’t have the answer to that question, but what I can answer is that consumer price inflation is not the result of the central bank. However, it’s the result of the federal government and its policies to appease the individuals who believe the earth is warming because of what they describe as man-made climate change.
If man-made climate change is real, and we don’t have a replacement for fossil fuels, and the people want the government to do something about it, one of the solutions I want to be tabled is to SHRINK the size of the government. I think some austerity is necessary in order for us to combat this climate crisis, a lot of public servants are using unnecessary resources; let’s put an end to it. It’s time for some austerity measures.
Interesting times ahead