11 Comments

You are spot on as Inflation is theft, it is as simple as that. Inflation of 1% was considered a serious problem in the 18th century as they were used to 0% inflation for hundreds of years. And then they formed the central banks! Ever since we have had regular recessions and huge inflation. The whole thing is meticulously planned to fleece the poor as much as possible.

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I love how you can break down such a seemingly complex issue and make a housewife in Texas understand it!

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For at least the past 120 years, the Western financial press has been selling the idea that deflation is a bad thing. Students learning about economics at university are often told this is because it is difficult to adjust wages down. This claim seems rather dubious: Given that individuals can be expected to increase in productivity over time, slowing increasing wages should not be a problem. Voices challenging this questionable idea are rare, and we can only hope that you are not the only one to raise it. That said, it is worth noting in this context that there is no one unified standard with which 'inflation' and 'deflation' are measured. In the basic math at the beginning of the article, you seem to be using the Austrian standard, which relies on the size of the money supply, for example using M2. But then you share a chart from the US Bureau of Labor Statistics graphing the US CPI (consumer price index), which is obviously not the same thing, and in fact, at least in modern times, consistently reports numbers which do not reflect actual monetary expansion. One reason for this is of course that monetary inflation does not impact prices evenly. On the contrary. It's important to point out that these are two different concepts.

For example, these days Western media is full of reports about the dangerous 'deflationary spiral' China finds itself in. This is however quite misleading, since the Chinese banking system in fact continued to print new money throughout the first half of 2023, maintaining the 10% p.a. pace it has followed for the most part of the past decade. M2 actually declined in July, but it's a bit too early to say if that will turn out to be a trend reversal. So in reality overall China is not deflating. Either we are just talking about specific sectors, or something else is going on. This is an analysis which needs to be done - one we may attempt it at some point.

Meanwhile in the US we see the opposite phenomenon, where M2 has allegedly been shrinking for 18 months now, while the CPI and the stock market have continued to rise. In other words, not only are these two types of inflation not the same, but they are ostensibly showing completely different trends. A rather curious situation.

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Good summation on the central banking cabal and their dependence on inflation. "In other words, central banks use the exact deflation they themselves create to argue all deflation is bad. So they poison us, then they hold up the poison as the reason to keep poisoning us. Good work if you can get it." Indeed, unless you are in the pharmaceutical industry and can create products and have a shield of extraordinary limited product liability, causing the need for more pharmaceuticals, and print money. :o)

More nations are awakening to the unsustainable footing the petro dollar is on. Unlimited fiat money printing and the Fed Now CBDC are NOT the answer. Hard assets and Crypto currencies will continue to set people free of central bank manipulations.

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Peter, could you do an episode on financial repression? I have been reading Russell Napier’s views on its inevitability as a solution to

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Thank you, Peter. Very clear and concise!

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There are two issues I observe here. Firstly, credits are generated by banks, albeit with support from the central bank. Secondly, the initial chart, titled "Monthly Inflation," indicates to me that Professor Hans-Werner Sinn may be correct in asserting the presence of both inflationary and deflationary periods. This ultimately leads to a target of 0% inflation/deflation over a certain period of time.

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Agree regarding Gold but not digital tulips. Bitcoin is a fiat currency without a government to back it.

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Our global debt problem. thanks for your insights!

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