Run-Away Price Inflation is Deflationary for the Economy, The Rule by decree Money System – September 3, 2021,
If there is any assumption that run-away inflation on prices will inflate the economy or stocks for that matter, it will all depend on the Federal government’s response to inflation. I personally don’t put as much emphasis on the Central banks or the Federal Reserve as other people do, because central banks at best facilitate the demands of the monarchy, aristocracy, or democracy.
The political policies of the day are the only thing matter and with an elastic fiat monetary supply, governments can buy a lot more than they otherwise could under a Gold, Silver or commodities standard. What this equates to is a lot of gambling on prices and more entities forced into the manipulated fiat prices which are currently under the control of the United States.
Currently, America has elected probably its most Progressive President of all time, and this President and his administration appear to have an extremely low financial IQ, what’s worse is that there are Progressive leaders all over the planet, with very similar policies, and if they’re not Progressive they’re outright socialists or communists.
Typically Leftist ideologies lead to war because Leftist ideologies are usually based on the justification for Theft ideals. The thinking in societies that lean more to the left politically is one of entitlement, I’m entitled to social justice, I’m entitled to clean energy, I’m entitled universal basic income, I’m entitled to wage and price controls, etc.
These entitlements often ignore hard economic principles, which are not only profit-driven but also make the COST of doing business their driving force. When any human feels cheated by anything other than God or Nature, that human will change their behavior. If a natural disaster comes along and destroys one’s business, that business owner need not worry about the economic feasibility of their business model, however when the government or a monarchy makes doing business almost impossible, what most business people will do is either consolidate or get out of a particular business altogether.
What this does in the modern era is that it creates an economic void of certain industries, which may lead to more companies being forced to outsource what could be done domestically internationally. This is not a big deal during the good times, but during the challenging times, this because extremely problematic, because fiat money has no real value, fiat money is merely the powers that be forcing people to barter using government-endorsed money.
What this means is that systemic ECONOMIC problems can be hidden, not only can systematic problems be hidden but politicians or the ruling class elites can continue to lie to remain in power because at least on the surface things might appear to be normal. How then does run-away inflation occur if governments have control over the money supply? My answers are shortages and the cost of doing business, the cost of doing business is the cost of doing business.
Once a nation becomes reliant on another nation to maintain its standard of living, if the nation that manufactures the stuff is forced to raise prices, the dependent nations are forced to pay for the increased costs. Once this happens and the government is in debt, ignore the money supply problem for a moment and think about the cost of doing business problem going forward.
Because if the money is fiat, more money can be printed, but it doesn’t mean more stuff can be made, and equally it doesn’t mean that the cost of doing business won’t be forced upward, because rule by fiat simply means that the politicians or ruling classes in charge can make a decree that there be price and wage controls and the people who do not understand what’s happening will obviously assume that the problem is an easy fix, because after all, it was an easy fix in the past? Why shouldn’t it be an easy fix in the future?
As run-away inflation is normalized, expect the real economy might start to deflate, do not be the fool that believes fiat money is real money, it’s not, ruled by fiat is Rule by decree, and history is plagued with very stupid leaders who thought they had this economics subject all figured out!