Here we go again. The Fed keeps raising interest rates, saying it will cure inflation. Their theory is that if you raise interest rates fewer people will buy because high interest rates add too much to prices. If this happens prices will come down because of lower demand. I am sure that high interest rates will, and already have, cut some spending. High interest rates will not only cut spending, but will destroy anything which the buyer has to borrow to buy. The resulting inflation will cut spending for cash customers also. I pay cash for stuff, or pay my credit cards in full each month, but I have cut spending because of inflation caused high prices. Be it a bank or credit card, high interest rates will harm the real estate industry, auto sales, and anything bought with interest or cash. After all, not all of us can pay cash for what we buy. Does this cut inflation by slowing down purchases? Keep reading.
The dictionary definition of ‘inflation,’ is ‘inflating’, or increasing, the money supply. You ‘inflate’ a flat tire by inflating it, or increasing the air in it. “Stott’s law,” states that, “The more of anything there is, the less it will be worth.” Water is cheap where there is a lot of rain, and in the west it is expensive, because there is so little of it. If Model A Fords were plentiful, they may sell for their original price of about $350. My 81-year old truck, sold for $400 brand new, and now is worth $31,000. It is the only one left in the entire world, so it is worth more.
Now look at the dictionary definition of inflation, which is correct, and compare it with the Fed’s efforts. Fair?
Higher interest rates, do cut spending, and the fed says that reduced purchasing because of high interest, will reduce the amount of money in circulation. Partially true, BUT, the correct definition of inflation, is not wrong. What has happened, is that under the Biden Administration, government spending, has ballooned, and so far, over $5 TRILLION has been added to the national debt, printed, and placed into circulation. Over $5 trillion dollars has been added to the money supply, decreasing their value and purchasing power, so you have INFLATION! Higher interest rates, cutting spending, will not cure inflation, because the government is increasing the money supply far faster, than the money supply is being reduced by less consumer spending, and higher interest rates.
Government caused inflation, causes wages to go up, and therefore income taxes go up, doubling the harm to everyone. Increased tax collections, are not offsetting government spending. Far from it. Taxes go up, prices go up, interest rates go up, sales go down, and it is not the consumer’s fault. We, are innocent. We are all simply suffering from the Biden Administration, congress, and department heads, who spend endlessly, thereby increasing the money supply.
The result is, government predictions that inflation will be with us for at into the end of next year. No one in D.C wants to, or has ever cut spending, or increasing the money supply. By the end of next year, what will have happened to real estate, auto sales, furniture sales, tractor sales, tire sales, and sales of anything, for that matter? All prices are going up, because of inflation, or AN INCREAASE IN THE MONEY SUPPLY. Are you increasing the money supply, by not buying, because things are too expensive? No! The money supply is increasing by government spending, and the more spent and printed, the less dollars will buy and it takes more of them to buy anything. There is NOTHING, the consumer can do about it, and decreasing consumer spending, is harming manufacturers, wholesalers, and retailers. GOVERNMENT SPENDING, THEREBY INCREASSES THE MONEY SUPPLY, REDUCRS THE VALUE OF THE DOLLAR, PRICES GO UP, HARMING EVERYONE. Read Stott’s Law again in a previous paragraph.
Want to fix inflation? It can only be done by throttling politicians and government. Politicians garner votes by giving away things paid for with your tax dollars, and those tax dollars are increasing the money supply. IT’S ALL SO DAMED SIMPLE! The dictionary is not wrong. As usual, whenever something goes wrong, it can all be traced to D.C.
Mar a Lago
D.C. Lies about everything, and the latest is the blacked-out affidavit. There is a very persuasive article in Wednesday’s Journal, pointing out that Trump has a right to keep his papers, and even those that might be secret. Other presidents have done so in history. They are telling you what was blacked out, but since we have no proof, we and the media have to accept it, as there is no other choice. How else can the raid be justified, other than lying about the contents of what they stole? Don Stott – don@coloradogold.com,
or 1-970-249-4646