historic levels of inflation (historically low) press toward deflation

Well, except that inflation has fallen to historic lows from 2005 to 2013. Rising prices of grocery items is not evidence of inflation.

In 2003, I published forecasts of a DE-flating of global credit markets (decrease in total outstanding debts or A/R). Many others did as well. We were proven right within the next few years and there is much more to come. In 2004, I also forecast a CONTINUING rise in fuel prices and how that would de-stabilize many spending trends in Europe and the US. By the time a gallon of gasoline cost more than $11 per gallon in the UK in 2008, shipping costs to bring food from far away places reached all-time highs. That, however was not because of inflation of their currency. That was just an increase in fuel prices and food prices.


FL wrote:

No, the government took skyrocketing food and fuel out of the inflation tabulation to hide the truth.

JR replies:

F.L., yes, there is more than one price index. That is not hiding the truth though.

That is increasing the precision of what is published. You can track the sub-categories or the cumulative Consumer Price Index. There are many other tracking measures as well, like the PPI, the CRB, and the CCI, not just the CPIs.

Further, there are issues like the increasing prevalence of “discount prices” and coupons and so on, at least in some areas. If you want to measure “purchasing power” of a currency, there are many ways to do it.

First, the whole idea of a currency having some inherent value is nonsense. Currencies are all paper. Their value is from the violence of the court system behind them. The court system demands the payment of invented taxes (protection rackets) and the court system dictates the currency in which tax payments MUST be made.

So, the first issue to notice when considering purchasing power of a currency is demand for that currency. Higher tax rates mean higher demand which means higher purchasing power (at least when the coercive threat of the taxing racketeers is stable).

You do not create currencies. Court systems of organized violence create currencies. So, you cannot be “robbed of” purchasing power when currencies fluctuate in value… since currencies are a SERVICE to you, not a productive business venture that you created and that you sustain through a productive contribution.

The “robbed” language is just the mainstream guilt-rage complex trying to rile the masses. Further, currency inflation is at historic lows while credit markets are deflating (as in decades of credit market inflation are reversing suddenly or deflating).

As the global “supply” of credit is plunging (as in the activity of lending), then demand for cash (currency) tends to rocket, creating a huge increase in purchasing power. It started in Japan in 1989. In spread to Europe by 1999 and the US by 2007.

I wrote about it extensively starting in 2003. However, many people may prefer their illusions and delusions (and rage and guilt) over clarity and calm and adaptiveness. Of course, that preference is programmed by media and public schools and churches, right? 😉


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