One of our more ardent and dedicated Brown County political watchdogs, Tim J Clark, recently responded to something I wrote in the Brown County Matters group.
As often happens, my response went a bit long, so I have moved it here. Tim wrote:
“I don’t understand how we keep printing money (monetizing debt) and avoid inflation.”
I’m a mere amateur student of monetary history and policy, so while I don’t purport to be the ultimate authority on the topic, my understanding is that, in response to the gargantuan, decades-long monetization of debt in this country, we’ve thus far avoided debilitating price inflation, mostly for a couple of reasons:
1) As a precursor to the phenomenon of artificially low price inflation, it’s useful to understand (as many people do these days) that there is no “free market” anymore, and hasn’t been since 1913 and the surreptitious, scantily-attended, Christmas-break passage of the Federal Reserve Act. The planned demolition of anything resembling a “free market” has been especially vicious since the crash of 2008. Combine wholesale currency creation (QE) with a zero interest rate policy (ZIRP), and what happens is pretty much all the Fed’s cash infusions are levered into stocks and bonds. Savers and equity investors are discouraged by ZIRP, and on the flip-side malinvestment resulting in insane risk, backstopped by the derivative market (a financial instrument originally designed to provide a hedge to farmers) is encouraged. IOW, Wall Street’s version of high-stakes Russian roulette.
2) The Fed has been pouring trillions of new “dollars” into the world for decades (I like to call them FUCs, or Fiat Currency Units). For any other nation, this would spell massive price inflation as more and more currency chases a finite supply of goods and services. But because of the $USD’s role as the world’s reserve currency, the vast majority of those dollars are used abroad for international commerce, and relatively little of it seeps back into our domestic economy to affect consumer prices, and thus price escalation is kept somewhat in check.
BONUS: a third reason prices have been relatively stagnant
3) Simply put, the markets are rigged. Using huge computer systems and high-speed trading algorithms (the biggest traders actually physically position their trading platforms as close as possible to the NYSE to shave milliseconds off the time it takes to initiate a trade), it is quite possible to pump or dump any stock they want, tweaking at will the liquidity of entire sectors, and thereby positioning prices wherever they see fit. Again, no free market mechanism currently exists at that level.
As an example of such market manipulation, I give you silver. The most reflective of metals, the most thermally and electrically conducive, possessing unique anti-microbial properties and over 10,000 industrial uses for which there is NO substitute (besides its 5000 year history as a legit monetary metal), and at this point more rare than gold, Ag nonetheless has been suppressed to between $13 and $18 an ounce for years.
Arguably the rarest commodity on earth (with the possible exception of fresh water), it currently has a gold/silver ratio of around 115 to 1, an absolutely ludicrous ratio when one takes a hard look at the market fundamentals.
And guess who inherited the Comex and custodial control of the silver market after the ’08 crash — JPMorgan/Chase, which shorts the market and sets the price via vacuous contracts and ETFs, selling “exposure” to silver without having to physically deliver a single ounce, thus rigging the price (BTW, the term for repeatedly leveraging an asset or commodity over and over without delivering the goods is called “rehypothecation“, closely related to the fractional reserve lending scheme employed by all banks).
And JPM also happens to be the world’s largest hoarder of physical silver, surpassing by far even the stash accumulated by the Hunt Brothers back in the early 70s. With its various holdings and control of the SLV, some estimate that JPMorgan/Chase is in physical possession of approximately HALF of all known silver reserves, to the tune of (we think) well over a billion ounces of pure .999 silver!
You can virtually set your clock to it: every week JPM manipulates the price of silver to absurdly low levels, then comes in after the fact and sweeps up all the physical silver they can from the proverbial “weak hands” of the public. It’s been going on for many years now.
And HSBC does the same exact thing in the gold market!
And so, Tim — whenever we hear ignorant lefties (who cannot produce a spending policy that isn’t laughable on its face) whine about “the evils of Capitalism”, fervently and vociferously promoting the same old tried-and-false socialist path down which many a country has traveled to their eventual demise, you and I (and others possessing a modicum of understanding of why the world has come to this point) can but shake our heads in dismay and our fists at the Devil himself for cursing us with central banksters and their lapdogs in Congress.
Free-market Capitalism died on December 23, 1913, when President Woodrow Wilson signed the Federal Reserve Act into law, taking control of our monetary system away from Congress (who at least can be held to account on Election Day), giving it over to an international cabal of wealthy, corrupt, elitist, manipulative and lying banksters. unaccountable to anyone.
The long and short of it: we will experience inflation whenever it pleases the banksters. And when they decide to go for the kill shot, the purchasing power of our currency will implode.
Buckle up… it’s happening as we speak.
Thinking of getting into precious metals? Good luck with that.
As a result of the “plandemic”, physical availability of gold and silver has all but dried up, and premiums are skyrocketing. Check your local coin and pawn shops. But you can still buy allocated (IOW, you are the legal owner) precious metals online, with quite reasonable storage and delivery fees. Check out OWNx.com.
