Many pundits have made the following statement, in one form or another, driving a car is the ultimate expression of freedom in America. Yet, your freedom to drive a vehicle is endangered by the political left and the neo-socialists who want to steal and destroy your freedoms. Mention economics, and most people’s eyes gloss over, brains disconnect, and they hope the pain will end shortly. Please, fight this impulse. I will attempt to make a highly complex topic simple and easily understood. While I might not get all the specific details correct, I aim to communicate economics to a general audience that is free and empowered to further research the topics for themselves. My links are reflected in the article for more information.
Money was discussed in a previous article and found here. In simple terms, money is the tool used to transfer goods from one entity to another, showing a legal purchase was made to change ownership, hence opening the first crucial role of money, legally transferring ownership of goods and services from one person to another. Unfortunately, legal ownership transference is where the government exercises its first controls, regulating cross-border commerce. When the government went on a growth spurt in the 1930s, ballooning into the behemoth, we have right now, the government used the excuse of maintaining cross-border commerce to steal products grown by farmers, regulate prices, and set up means and methods to ensure the government was the only winner.
The 1930 legal battles that wound up in the United States Supreme Court over price controls saw the citizen’s first attempt to reign in the government and failed miserably. Worse, these first moves by the citizen were the first exchanges in an economic war that has raged ever since—money stores value. Think of the money found when you do laundry. You have no idea how long that money was lost, but the value of the money has not changed, you presume, and you celebrate finding the money. Except, the value of that money has changed through inflation, and the government’s hidden tax (inflation) has robbed you of value.
Let’s say you found $20 in the laundry. When you first lost that $20 bill, it had more value, e.g., you could purchase more with that money than you can now. Sure, the value printed on the money still has $20 worth of goods or services, but the cost of those goods and services went up, restricting your ability to purchase. Hence the economic warfare being waged by your government. The government essentially said we would not worry about inflation. Meaning they will devalue the money you hold for their own political purposes.
An idea was floated by an economically challenged person to print a $5 trillion bill and use this to pay off the Chinese debt. The problem is the devaluation of the money printed will capsize American citizens due to the hidden taxes of inflation. Making that $5 trillion bill or bills would devalue the dollar and crash the American economy. The stored value in the printed bill would not stand up to and be accepted as a medium of stored value sufficient to pay the debts incurred. Is the problem more clear; when money is printed, each dollar, pound, euro, etc., devalues the stored purchasing power of the money you currently hold in hand.
Stored value is the second tool for waging economic warfare by the government against its citizens. Consider all the money printed to pay for the supposed Coronavirus Tax Relief and Economic Impact Payments the world’s governments made to their citizens. If you had $100,000 in savings when these monies were printed, your savings were devalued by the inflation rate, which is currently at a 40-year high in America. The government is reporting inflation at 7.9%, so your $100,000 in savings lost the equivalent of $7900. But, the government does not ever report inflation at the actual level, and the actual level of inflation is ranged between 8% and 45% depending upon the purpose or product you are trying to purchase. Meaning your $100,000 could have a value of $92,000 to $55,000 in real value. A hefty tax indeed!
Stored value, the number printed on different bill faces of currency, is static. The actual value, e.g., the number of goods and services purchasable, is not fixed, and the government allows an annual inflation rate of 2% as “normal and acceptable.” Thus, your $1 will have a purchasing power of $0.98, which is compounded year-over-year. Thus, over a decade, that 2% inflation rate is now reducing your $1 to $0.80. Multiply that for the $100,000 and a decade of saving, receiving interest that does not equal inflation to compensate means your money in your savings account has lost $20,000, just from the government allowing inflation at 2% annual growth. Let’s say your bank is generous for savings account holders and provides a published interest rate of 3%, subtract the inflation taxes of 2%, and you are only earning 1% interest on your money. Is this the bank’s fault or the government’s?
Do you see how the government is robbing you through economics? Your 5% raise is only 3% once the inflation devaluation has been factored into your budget. Play the lottery; the taxes alone might kill you, but the devaluation of the money reduces the actual purchasing power of your winnings. If you do not understand the economic warfare being waged against you by your government, you will lose more than you ever gained in winning the lottery. Yet another reason why lotteries are a tax on stupid people, for even when you win, you lose!
Cash has another problem beyond inflation, money supply. The money supply is the technical term for ensuring banks can replace worn-out, ripped, and damaged money. Money supply plays a role in how much money your local store has on hand to provide change and cashback to customers. For employers who pay employees in cash, the money supply is a significant problem with extremely high costs. The government regulates those costs and passes them onto consumers through banks and lending institutions. Are you struggling to get a loan; this is another by-product of money supply woes. Paying higher fees to change money to another currency for your trip is another money supply product. Money supply remains another weapon of the government to affect economic warfare, and many people do not understand this principle, making the government’s policies more effective.
Before 1980, the basic money supply was measured as the sum of currency in circulation, e.g., cash, traveler’s checks, and checkable deposits. Currency serves the medium-of-exchange function but denies people any interest earnings. However, as discussed, interest earnings are not all they are cracked up to be due to inflation. Cash under a mattress, lost in pockets of clothes, stuck in a book in your library is black money; it is as dead as yesterday’s fish and constantly devalued by inflation. The money supply tries to regulate the cash on hand to lend as a tool to protect your money from inflation. Except, the government constantly allows a 2% inflation rate, negating a lot of savings accounts and other interest-earning propositions.
Want a new car, consolidate your credit card debt, or try to buy a house; all of these loan products are an extension of the money supply and the regulation of money supply by the government. Important to note that your credit cards and bank-issued or employer-issued debits cards are not affected by the money supply, and this is another reason why credit cards and debits cards are so dangerous. These tools are agreements between you and the issuer, where money is transferred when the tool is used, and the consumer is responsible for all the fees the government insists upon to help pay for the money supply.
In waging economic warfare, it remains imperative to know about economics, identifying what money is, its role, and the fiduciary controls the government exerts to attack its citizens. Some may call my language inflammatory, but tell me, do the inflationary costs right now not feel like your taxes have skyrocketed? Inflation is a hidden tax, a tax fully controlled by the government, and the value of your money decreases yearly because the government says 2% inflation is acceptable. Who made this decision, an unconstitutional entity called the Federal Reserve Bank. Since its inception, Congress has tried to obtain transparency and accountability from the Federal Reserve Bank to no avail. Do you understand why I take umbrage with the Federal Reserve Bank?
The governors of the Federal Reserve Bank decided your money could be taxed at 2% inflation annually as a normal condition of doing business. These people set the interest rates you pay for your credit cards and are not paid for your savings accounts. Looking into the history of interest rates since 1900, there is always volatility; the Federal Reserve’s actions have since the 1980s to not allow savings rates over 5%. When adjusted for inflation, that’s a 3% interest rate for those trying to save money. What does this mean; fewer people are saving money. Look where those trying to beat the 3% have invested their money, the stock market, where volatility is a minute-to-minute occurrence, higher risks against less interest, where your money remains subject to taxes, fees hiding other taxes, government fingers, and inflation.
Your government did that to wage economic warfare against you, to empower them to steal your rights, freedoms, and liberties. There is no other way to describe what is happening globally in all governments. China plays games with the value of its currency to power trade deficits. This, in turn, changes prices and increases costs. These actions are taken to “compete,” when in reality, the activities cover massive debt problems in China. If the CCP cannot keep the tap turned wide open on trade deficits, their money supply drys up, and debts come due in a bankrupting tsunami!
The European Union has never been fiscally sound because the various members of the European Union are taking advantage of the productive members to cover the costs of the fiscally useless members. France cannot survive as a country without the European Union’s largesse; Greece, Portugal, and several other countries are all in the same boat. Their governments did this intentionally as political games to stay in power. When these countries run out of other people’s money, they will be forced to change socially, and the tsunami of debt to the World Bank and other nations will not be pretty.
Economics drives these problems mainly due to the lack of knowledge of the lines of congruence between economics and the psychology of governing. The enemies of freedom understand economics, and this is why these tools have been so successful in waging war and stealing freedom, rights, and liberties through monetary policy. Until we, the rightful owners of government, understand what is happening, we will all be at the whims of our enemies.
© Copyright 2022 – M. Dave Salisbury
The author holds no claims for the art used herein, the pictures were obtained in the public domain, and the intellectual property belongs to those who created the images. Quoted materials remain the property of the original author.