Beware of the Idea of March, so said the soothsayer to Caesar. And on March 15, several Roman Senators drew knives and murdered Caesar.
We have a different type of warning for the Ides of March in 2022. Not one of murder, but one of murdering a nation. One of the chief conspirators in this modern day tale is Nancy Pelosi.
One this day, Nancy stated, “The government spending is doing the exact reverse, reducing the national debt. It is not inflationary.”
The Speaker of the House went on to say global inflation “with starts with” Russian President Vladimir Putin. “We’re paying very close attention to it, but this starts with Putin because the global inflation for reasons beyond the gas price… Global inflation is something that we have to deal with globally, but we have our responsibility to deal with it at home, and we have legislation that does just that, by increasing supply and, way that is not adding to inflation.”
After reading through this quote, I realized Nancy is confusing terms and different economic lessons. I am not sure the Nobel laureates she mentioned are confused as well, but Nancy is confusing ‘Supply and Demand’ with Inflation.
Inflation is a specific term used for millennia to describe situations where government desires to spend more than it has in its store houses. Rather than controlling its desires until it has sufficient funds, government skims the edges of coins and mint more coins from the scrapings. But each coin weighs less than the standard, making each coin worth less.
Serrated edges on coins is a common way for coin minters to insure you can’t skim too much gold off the edges of the coin, as the coin would lose the serration, immediately demonstrating to the receiver of the coin the coin is not worth what’s stated on its face.
Another way is to mix the gold or silver with cheap, inferior metals. The coin may weigh the appropriate weight, but the amount of gold or silver within the coin is substantially less than the set standard.
Since government no longer mints gold and silver coins, let’s make this simple.
Let’s say I have 100 coins and 100 pieces of paper. I secretly print 200 more pieces of paper without any more coins finding their way into my vault. So what’s each piece of paper worth? One third of what it was, because now it takes 300 pieces of paper to exchange for my 100 coins.
The US government has been doing this since the creation of the Federal Reserve System in 1913. That’s why Alan Greenspan said, “The Federal Reserve created AND SUSTAINED the Great Depression.”
In our recent pandemic, government printed $4-5 trillion dollars and put those dollars into circulation through your Covid checks, the PPP and other methods. Since nothing is done in secret, we realized as consumers that each dollar is worth less as there’s more paper but no new gold coins in Fort Knox. So you, the stores, and I ask for more money to balance the nation’s paper money with the amount of gold and silver available.
Why gold and silver? Because they are rare. Oil, corn, cotton, and other things can be produced more or less creating inflationary cycles at will. With gold and silver, you have small ripples in the economy, not 20 foot waves between the good times and bad.
It’s been said that 40% of all Federal Reserve notes didn’t exist 2 years ago. So you have the marketplace raising their prices to match this 40% more paper in the marketplace.
That’s inflation.
Now Nancy comes along and says, in effect, if you are maxed out on your credit card (reached the limit on the national debt), the way out of that debt is to raise your credit limit and spend more.
Well, if it’s good enough for the government, why isn’t it good enough for me?
And if government is to be praised for doing such actions, why do I go to jail or lose my credit card (along with my ability to spend money) when I do the same thing?
At some point, the paper loses all value, such as the Weimar Republic (Germany) or Venezuela. Wheelbarrows carrying the money to the grocery store become infinitely more value than the paper within them. And the economy crashes.
Would you give away something you’ve sweat, bled and toiled for to others without compensation – consistently and forever? Of course not. Neither will farmers, so food production stops. The same thing happens to all our commodities, from gasoline to heating oil to electricity to wood to nails to shoes to clothing.
Chaos reigns supreme.
And when the society has had enough of the chaos, they ask,
“Where’s someone who will make our streets safe again?”
“Who will ensure we can walk to visit our family safely?”
“Who will get the schools open again?”
And the answer will come from a person who was set up to be a dictator when the extreme inflation began – “I can and I will.”
And like all good sheeple, the masses will elect this person dictator. At that point, the real tyranny begins.
So how do you prosper in such a world? How can you ensure good for yourself, your family, and your loved ones?
That I can tell you – in my new book – exclusively found at https://TedLeithart.com
And should you sign up for my email list, I’ll send you the secret chapter, which tells how to avoid two, three, or more generations from falling into tyranny. I’ll provide case studies for you to consider, to implement into your life and to thrive.
