There is only ONE Possible Scenario for where Inflation can ever be "Capped"

As I had said before, Inflation historically is something every government in history has experimented with, even with a Gold system in place, even where the Economy is based on Credit rather than Debt as we have had since 1971.

That being said, it is usually only typical in the early stages of inflation whereby Inflation created in the system, can be accounted for to offset its effects and keep prices stable, but that means that every Dollar or Unit of currency placed into existence, has an equal output of productive value that corresponds to it.

Necessarily, this means that you would have to have a Highly Productive and Competitive economy in place that is able to "weather the storm" so-to-speak, for the consequence of introducing inflation into the system and eventually catch up to speed in valuations.

However, as I had mentioned in the past, the tendency for governments to abuse this "feature" of controlling currency, is often abused and never tempered, because it allows a quick fix for governments to easily satisfy their own debts, at the expense of everyone else.

Whether there is Gold Backing or Not. The Gold Backing insures that the Currency can be completely liquid or guaranteed, whereas the lack of Gold-Backing, makes the currency a provisional certificate or claim.

But it is obvious we are well beyond that Era.

Truth be told, the Era of when America was running that type of system where they could generally offset inflation to some degree, was from 1913 but completely dismantled by 1971.

What they did in 1971, immediately brought some inflation into the 1970's and 1980's, but it was quelled from using Debt as Reclassifications, Bundling it up and selling it off, as various fictitious financial assets, often in most cases which are known as "Derivatives".

It is important to know that the Assets Globally in derivatives, even priced only in the USD currency, exceed 2 Quadrillion Dollars. It may even be as high as 4 Quadrillion, official at the time of writing this.

In order to satisfy the demand based on consumption patterns of Humans, this means that you would need 30 "Identical Earths" with all the "goods" "food" "real estate" and "infrastructure" that we have here, in order for those Dollars to be fulfilled.

Obviously that is an impossibility, and if you understand things and the big picture in the way I do, you can only know that this means that the World Powers will resort to "war" to prevent those Dollars pursuing goods.

Those in charge of the Banks, want to write off the Debts, as well as the People, and while this Debt and most people will have to be written off, it needs to be seen that they created this problem from the get-go because it never needed to become this bad or out of control.

All of this is important to know, because the thing is when Inflation is put into the system, even if it exists in the form of "derivatives", it does not increase the price for everyone until it is spent, and therefore circulates into the economy.

A lot of money that exists in the system is used as "patch" money, and a lot of this money which I call "patch" money is held primarily by Big Moguls and the Banks, and is only permitted to be spent if given the "go" by a specific authority, because it is used for strategic purposes of maintaining the Banking system itself.

A lot of it also artificially props up things like Real Estate, as well, even keeping valuations far higher than they should be.

American Economics are so distorted however, that in actual true economic terms, if real economic values were asserted today, Residential and Commercial Real Estate would be like $1 or even pennies for a whole slew of properties, as hard as that would be to imagine, and yet things like Oil, Food, Electronics and Clothing would be hundreds, if not thousands of dollars per item, at least relative in terms of what a current dollar is worth.

This may seem outrageously impossible, but do not forget how back during 2020 how they even brought the valuations for Oil to be under $0.00. Even a commodity, should at least be able to be worth a penny, because it is a physical, tangible good, and especially something like Fuel.

Even I was caught by surprise on this, because I believed that it could go no lower than $0.01, and yet it became a reality that the Oil Producers were literally paying people to take their oil from them.

That is absurd, it makes no sense whatsoever!

Yet it is because of how Central Banks maneuver and manipulate the markets, price controls and price stability, that prices are otherwise at the levels they are, for better or for worse.

One thing you should understand about the Central Banks, and those who call for "higher interest rates" - and I am against Private Central Banks altogether, BUT, assuming if the role of this system with their control of interest rates is to even be "functional", Central Banks can only legitimately or safely raise interest rates in an environment where the Economy is productive and creating greater revenue and not adding to the Debt Loads, because as the Debt Grows and Interest payments increase along with the Interest Rate, that makes obtaining new currency VERY expensive and unattractive, in the system.

With Low Debts and High Production / Value in the Economy, it would not be seen as unattractive, and would be seen as a win-win situation for everyone, even though THAT is still based on a fraudulent system that has borrowed time!

Truth be told, ever since we came out of 2008 with the Great Recession, the cooking of the books that they had done, ensured that the Western Economies cannot afford to be on High Interest rates but that it must be near to Zero or Zero Rate, at least predominantly with the US, since the European Banking system ties in closely with the US system. The ECB largely follows the Federal Reserve System's command.

So, the truth is, this system cannot handle High Interest rates in the environment we exist in today, and one whereby production and markets in the West are horrific compared to what you find in China.

There's no way out of this mess except for ultimate doom and collapse, but as the Interest rates are kept where they are or if even increased, Businesses will continue to fold up and go bankrupt and liquidity in the system will remain scarce.

But the problem is, if liquidity is increased (which is essentially for even maintaining the system), you will see Inflation spike to even greater levels suddenly.

Comments

  1. I've suspected for years that people like bezos and musk are just pawn placeholders to corral the currency to keep the velocity down and therefore inflation in check somewhat.

    I don't think they can spend any of there billions without specific permission. They live in a bigger prison then the average person.

    ReplyDelete

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