Shifting the Blame

Prices of goods and services are going up, to the surprise of no one. The modern welfare state however, has the causal relationship completely backwards.

In a typical report of this false revelation Statistics Canada points to rising fuel prices and the cost of restaurant meals as the principal cause of a spike in inflation.

Actually, an increase in the general level of prices in an economy cannot occur without a concomitant increase in the supply of money and credit. A stable supply of money would see the decline of prices over time for most efficiently supplied goods and services with relatively stable pricing for everything else.

So why does the price of almost everything keep going up? Because the supply of money and credit keeps expanding. Who or what institutions are responsible for that? Central Banks like the Bank of Canada issue currency and “manage” interest rates which affect supplies of credit.

Now, rather than blaming rising prices for inflation, logic tells you that an increased supply of money and credit will naturally result in higher prices for other goods and services in the economy. Money is a good, the universally accepted good. The more of it you have the more you are willing to trade for other goods you value more.

So why do we have this mess of rising prices, increased taxes, more government spending and more government debt? There are many reasons, but fundamentally it is because we have come to rely on the State as a source of economic goods and services. This results in escalating government spending.

Government produces nothing however. It must pay for its spending by taxing us and/or borrowing. The debt is to be repaid by future taxation.

Such looting cannot continue indefinitely without taxpayer rebellion. I am given to understand that historically the level of tolerance terminates at about twenty-five percent of the value of economic production.

When taxing and borrowing reach upper limits then, governments turn to inflating the currency. The result is a systematic looting of the productive population in the form of continuously rising prices for economic goods and services.

This massive deception is reinforced by the shifting of blame for inflation on the rising prices themselves, with the further insult of telling us that the prices of some particular goods are responsible.

Aiding and abetting such fraud is the reporting media which challenges nothing much the government puts forth as economic explanation. This is the same media in decline which is now in supplication to our government for financial support of its continued operation. I doubt whether that will improve journalism.

In relying on government agencies and media parrots we remain ignorant of truth unless we think for ourselves.

Who then is to blame?

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