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A "Mostly Peaceful" Heist (Part 1)
On August 25, 2020, CNN ran the headline "Fiery But Mostly Peaceful Protests After Police Shooting."
While we recognize that the media, on both sides of the aisle, have a business of deception and manipulation, this headline caught a lot of attention. Despite a fiery scene in the background, the media told us the protests were peaceful.
I am not here to comment on the events that took place that day; however, my intention is to compare the deception of the media in this instance to the deception of the monetary system.
Similar to the "mostly peaceful" protests, we are told by economists, academics, and financiers that "moderate inflation," arbitrarily defined at 2%, is healthy for the economy and, in turn, good for us.
However, despite the establishment's narrative and reporting on inflation, reality paints a different picture.
Inflation, defined as the expansion of the money supply, is theft. The financial system that exists today is based on stealing, and this "mostly peaceful" heist has been taking place for over 100 years.
While it has largely gone unnoticed, the heist has become more evident in recent years and will likely intensify going forward. History proves that the debasement of currency (money printing) ultimately leads to a collapse of society as we discussed in “The Fiat Cave: An Allegory of Monetary Deception (Part 2).”
Fortunately, this time around, there is a secure vault for your savings.
Inflation: The Expansion of the Money Supply
As we begin this piece, it's essential to further define the word inflation.
Inflation is simply the expansion of the money supply. We need to be on the same page here because the definition has changed over the years and is intentionally ambiguous.
The current definition of inflation, per the Federal Reserve's website, is "the increase in the prices of goods and services over time. Inflation is a general increase in the overall price level of the goods and services in the economy." The Federal Reserve measures inflation through the Consumer Price Index (CPI).
Their definition does not speak to the root cause of the price increases, which is mainly expanding the money supply, or money printing. While there are other factors that could drive higher prices of a good, such as growing demand and shrinking supply, the steady increase of prices across the board over the past 100 years is due to intentional money printing.
By its true definition of inflation, i.e., the expansion of the money supply, we find that inflation is much higher than the Consumer Price Index (CPI) metric that the government uses.
In the United States, the Federal Reserve and US Government increased the money supply by $6.4 trillion, a 42% increase, between March 2020 and the end of 2021. Not all prices increased by 42%, but overall the money supply increased by 42%, which led to much higher prices for many goods.
The chart below is the M2 money supply, which has since been discontinued by the Federal Reserve following the massive money printing post-COVID. You can see clearly that the money supply continues to grow and certainly accelerates following the 2008 Great Financial Crisis.
2%: A Mostly Peaceful Heist
Now that we have defined inflation as the expansion of the money supply, we can investigate the heist unfolding before our eyes.
It all starts with the indoctrination by the Fiat Jailers, the central bankers and governments. Although prices were largely stable during the gold standard, the Fiat Jailers have convinced us that increasing prices at a "moderate" rate is natural and necessary for the health of an economy.
The truth of the matter is that "moderate inflation" is not indicative of a healthy economy and is not natural. The reality is that productivity gains, largely from technology, should drive prices down over time. Technology drives abundance. It allows us to produce more with less. I would recommend checking out the book The Price of Tomorrow should you want to explore this in more detail.
Thus, the higher prices we are experiencing today, which have been steadily rising for over 100 years, are due to the money printing by governments and central banks to enrich themselves at the expense of the masses.
The key for the Fiat Jailers is for the inflation to be "moderate." The heist is a marathon, not a sprint. Should too much money be printed in too short a time, a larger group of us, the hostages of the monetary system, become suspicious, which is precisely what happened in 2020.
Thus, the Fiat Jailers decided that "moderate" or "stable and low" inflation was subtle enough, and through some mental gymnastics, they convinced the masses to accept it.
However, "moderate inflation" is not well defined and has changed over time and will change again in the future. Most importantly, it can be adjusted and manipulated by the Federal Reserve.
The global inflation target for developed nations has been 2% roughly since the 1990s, and 2% became the explicitly stated objective of the Federal Reserve in 2012 by Former Fed Chairman Ben Bernanke.
2% was arbitrarily decided and was changed again in 2020 following the annual FOMC meeting. As the Federal Reserve knew that inflation would not be "transitory" and would be persistent, they changed the target from 2% to "2% on average over time" in 2020.
Below are two excerpts from the Federal Reserve's website that explain the "2% on average" target and why inflation is good for the economy (emphasis added).
"The Federal Open Market Committee (FOMC) judges that inflation of 2 percent over the longer run, as measured by the annual change in the price index for personal consumption expenditures, is most consistent with the Federal Reserve's mandate for maximum employment and price stability. When households and businesses can reasonably expect inflation to remain low and stable, they are able to make sound decisions regarding saving, borrowing, and investment, which contributes to a well-functioning economy."
"For many years, inflation in the United States has run below the Federal Reserve's 2 percent goal. It is understandable that higher prices for essential items, such as food, gasoline, and shelter, add to the burdens faced by many families, especially those struggling with lost jobs and incomes. At the same time, inflation that is too low can weaken the economy. When inflation runs well below its desired level, households and businesses will come to expect this over time, pushing expectations for inflation in the future below the Federal Reserve's longer-run inflation goal. This can pull actual inflation even lower, resulting in a cycle of ever-lower inflation and inflation expectations."
To summarize, their target of "2% over the longer run" is completely cryptic and not backed by any data. Second, one of the Federal Reserve's mandates is "price stability." How do prices going up 2% each year equal price stability? Furthermore, their rationale for increasing prices via money printing is that people will spend their money rather than save. Their implication here is that if prices were to go down, then no one would spend money. This is entirely ridiculous. Imagine needing a car to commute to work. You have no other option. Are you going to forgo the purchase for a year and walk to work so you can save 1-2%?
Unfortunately, most of us will never question that until it is too late. We have been conditioned to accept that prices naturally rise and that "moderate inflation" is a sign of a healthy economy. So the Fiat Jailers continue to enrich themselves through printing money, making our cost of living increase and our savings decrease.
Those fortunate enough to grow their earnings faster than the rate of inflation can build savings; however, those savings must be invested in risky assets such as stocks, bonds, or real estate in the hopes of preserving wealth. There are, of course, risks with these investments, and there are financial crises that are occurring more frequently and more violently.
When these financial crises emerge, many people panic and sell their assets at a discount, losing wealth. In addition, these crises end up being beneficial to the Ruling Class, as more money is constantly printed and thrown at the crisis. Between taxation and money printing, the commoner comes out of the crises with less, and the Ruling Class amasses more.
There is, of course, a whole segment of the population living paycheck to paycheck or with minimal savings in an account, earning far less than the rate of inflation. These people, the majority, are the real victims of the heist. Those who have no option to protect themselves against theft are perpetually hostages of the monetary system.
As we will explore in Part 2, despite the heist of savings due to money printing initially being "mostly peaceful," as governments and central banks continue to expand the money supply to a greater degree, the fabric of society begin to tear.
Thank you for reading! If you enjoyed this, please give it a like below, and if you have any feedback or questions, feel free to leave a comment. Stay tuned for Part II.