11-24-18 Inflation Monster
Nearing Midnight: Why Does the Inflation Monster Refuse to Leave His Cage? - Todd Strandberg -
The traditional definition of inflation originally meant an increase in the money supply. When a nation printed more money, it would automatically drive up the cost of goods and services. At one point during the American Civil War, the Northern army had overrun the city that printed the South's confederate currency. During the time the South relocated its printing operation, inflation came to a halt.
For some strange reason the financial laws regarding inflation have been suspended in the US. Despite the fact that we have created more fiat money than any other time in our nation's history, inflation remains very tame. In 2008, the nation's banks had $301 billion on hand. Today, the cash pile of banks has reached $2.1 trillion. Over this same period of time, M2, the broadest measure of money supply, has gone from $7 trillion to $14 trillion.
The growing national debt should have also applied pressure on inflation. In the year 2000 the national debt was $5.6 trillion, in 2008 it had reached 10.5 trillion, and today it is $21.3 trillion. There once was a time when people would panic about reaching about every major monetary milestone. Lately, people have become so desensitized to the ballooning debt, the big numbers amass with little reaction.
The one area where it's normally impossible to ignore inflation is minimum wage laws. More and more Santa Claus politicians have driven up costs with freebies, like a $15 minimum wage or universal basic income. Once the cycle of inflation gets going, it feeds on itself. The "fight for $15" becomes the "fight for $20." Then it's "fight for $30," "fight for $40," "fight for $50," and so forth.
The massive increase in the money supply can be seen in the rankings of the very rich. In 1982, Forbes Magazine started its list of 400 wealthiest Americans. At the time, there were only 13 billionaires, and a net worth of $75 million was needed to be secured a spot on the list. Today, everyone on the list is a billionaire, and you have to be worth at least $3.0 billion to make the cutoff.
The richest person on the 1982 list was a ship maker, Daniel Keith Ludwig, who was only worth $2.0 billion. Sam Walton, the iconic founder of Wal-Mart, appeared with a net worth of $690 million (his family is now worth $118 billion). Legendary investor Warren Buffett was only at $250 million (currently worth $85 billion).
The current richest man is Jeff Bezos, and Forbes has recently estimated the Amazon founder has a net worth of $154 billion. A profound time of financial tranquility allows Bezos and thousands of other billionaires to sit peacefully on their wealth. If they all tried to spend their money at once, there would be a huge surge in inflation.
In 1980, the Hunt Brothers tried to control the silver market by buying up millions of ounces of the precious metal. At their peak, they controlled 150 million ounces of silver, which was only about 25% of global production. If Jeff Bezos wanted to control the silver market, he has the financial resources to buy the global silver production of the next 20 years.
Inflation is certainly no vanquished beast. It rages in many parts of the world. The nation of Venezuela currently has an annual inflation rate of 3,000,000 %. The countries of Turkey, Iran, Argentina, Libya, Egypt, and Angola all have an inflation rate above 20%.
I had already concluded about a decade ago that supernatural forces were protecting America from financial calamity. Because we seem to be the linchpin holding everything together, the U.S. needs to continue defying economic gravity.
The introduction of a trade war made the whole situation into a comedy. The Trump administration has a dispute with five major trading partners. Any one could trigger runaway inflation. Our luck remains freakishly positive.
The only explanation for why the economy has not collapsed is Bible Prophecy. God seems to be setting the world up for a major economic disaster that will allow the Antichrist to step in as a financial savior. Until the time is right, He will keep the inflation beast under lock. Because we are in such a profound state of financial peril, I think time is very short.
"And the second beast required all people small and great, rich and poor, free and slave, to receive a mark on their right hand or on their forehead, that no one could buy or sell unless he had the mark-the name of the beast or the number of its name" (Revelation 13:16-17).
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