Here we are at ten percent inflation. What did they think?
That they could increase the money supply by 40 percent in two years without triggering inflation?
And now I am reading that the Democrats want to deal with inflation with more spending to help communities hurt by inflation. Really?
You would have thought that Democrats would have learned their lesson after the inflationary 1970s when US voters elected Ronald Reagan and a Republican Senate. And inflation went down. And the economy boomed.
Actually, if you read La Wik, the Democrats in the 1980s came up wth a narrative that spat on the Reagan achievements as “trickle-down economics.” I think that experts agree that a narrative like that is called “economic denial.”
Look, I’m all in favor of narratives; that’s how politics works. But, I would say, Rule One is to know what you are doing on the economy. And that means, if you are a ruling class, to know how to avoid dumb mistakes that screws up the economy. Because dumb mistakes on the economy can lead, in normal cases to a change election, and in abnormal cases to regime change.
In my book having an inflation explosion is a dumb mistake.
But you can see that there is always a problem. If you generate lying narratives then a lot of your not-so-bright followers are going to believe them. It is very hard to keep the special knowledge within a wise elite while distributing lies to the world at large. Not every elite group keeps the special knowledge to themselves like the Masons.
But, reading reports about our Democratic friends and heir willing accomplices in the media, I don’t detect any secret knowledge among the higher degrees at the Lodge. They seemed just to have blundered into the thing, without anyone on the team doing the secret handshake and saying Whoa Neddy.
What I want to know is another special knowledge about inflation over the last 20 years. It has seemed to me that price inflation has been a lot less than the increase in money supply, and that interest rates have been a lot less than they ought to have been, given the underlying inflation of about 2 percent.
What I suspect is that the increase in money has gone into inflation of stock and real-estate prices rather than into increase in consumer prices, which is great for the baby-boomer educated class like me, but not so good for ordinary commoner Americans. I would like to know how the Fed engineered that. Unless of course it was all an accident created downstream of some fatherly advice from Blackrock.
Meanwhile, gold prices are trending down even as inflation is going up. What’s that all about? That we have already whipped inflation, and that any further increase in intererest rates with crash the economy?
You tell me.