The Great Inflation Lie

Low inflation is not good for the economy because very low inflation increases the risks of deflation, which can cause an economy to stagnate. The evidence is that falling and low inflation can be very bad for an economy.

- B.S. Bernanke, Chairman of the Federal Reserve, October 2013

The economic Revisionism above is arguably the most-evil lie being propagated in the world today. While there are numerous ways to demonstrate the economic perversions implicit in this falsehood, let’s start with one point. The Bankers who continually tell us how “good” inflation is for us never define what they mean by “inflation”.

As regular readers know; definition of terms is the starting point of all legitimate analysis. If you want your audience to understand your argument; first (obviously) you have to ensure that the audience actually comprehends the terminology which you are using.

Conversely, Con-Men have a precisely opposite modus operandi. They deliberately use terms which are poorly-defined/poorly-understood, because when doing so it’s much easier to trick and scam people. In merely explicitly defining inflation; we can reveal these banker Con-Men as the malevolent thieves which some know them to be.

Inflation (in the simplest terms) is the speed at which our money loses its value. This definition is easily proven with empirical evidence. When you go to the supermarket to buy a dozen eggs, and those eggs cost 10% (or 20%) more than they did six months ago, the eggs haven’t changed – in either quantity or quality. It is your money which has lost 10% of its value over that six-month period.

Obviously anyone with a functional mind knows that it is not “good” for our money to relentlessly lose its value; every minute of every day, every day of every month, every month of every year. Who wants the paycheque which they work so hard to earn to shrink (in actual purchasing-power) every time their receive a new one?

Our governments understand this. This is why they not only conceal the nature of inflation, they also lie about its magnitude. A particularly flagrant example of this constant lying occurred in July of last year, and has been cited in many previous commentaries.

In the same month that the World Bank was warning that global food-inflation was increasing at an annualized rate of over 100%, and governments in Asia were having an emergency-summit about this global “food-price shock”; the U.S. government was reporting (as its “broadest measurement” of inflation) a rate of literally 0%.

Assuming that the entire (gluttonous) U.S. population didn’t all stop eating for that entire month; the inflation number reported by the U.S. government that month (in this era of “globalization”) wasn’t simply a lie, it was an enormous lie. But as has been explained to readers previously; the Inflation Lie is a multi-purpose lie.

One of its primary purposes can be seen below: deceiving the Little People (the bottom-80% of the population) so that they don’t realize the speed/extent at which their paycheques have been destroyed.

The chart above provides three lines, with the black line being “nominal wages” (i.e. with no adjustment for inflation). The other two lines represent alternate methods for discounting wages with inflation, in order to provide us with our wages expressed in “real dollars” (dollars supposedly worth the same value, over time).

The blue line represents the (official) Inflation Lie. In other words, if we accept the fictional “inflation rate” reported by the U.S. (and other Western governments) each month, then supposedly Western paycheques have remained roughly flat for the Average Worker over the past several decades.

Then there is Reality. The green line represents the change in U.S. (and Western) wages using one consistent methodology to measure inflation each year; the only mathematically valid method of reporting any statistic over time. Conversely the U.S. government continually adjusts its method of calculating inflation; while never revising older data with its new methodology.

Conveniently, for 40 years, these changes in “methodology” have always reduced the magnitude of inflation. While the Banksters continually tell us how “good” inflation is for us; for forty years the government’s charlatan statisticians have been changing the statistical definition to make inflation look as low as possible. If inflation is so good for us, why conceal it?

Thus in real dollars, U.S. (and Western) paycheques have shrunk by roughly 2/3 over a little over four decades – all the way back to (literally) Great Depression levels. With Reality now presented and defined for us; we can revisit the claim by B.S. Bernanke that inflation is “good” and “deflation” is bad.

If inflation means continually shrinking dollars and continually shrinking paycheques; then obviously deflation is the opposite. Prices go down as our currency appreciates, and our paycheques (in real dollars) increase in size. This is “bad” for us?

Clearly, the Bankers (and our governments) have been lying to us. It is inflation which is the ultimate evil/horror in any economy, and deflation which is (in fact) an expression of economic health. Why then have the Bankers been able to successfully deceive the masses into believing the precise opposite of what can be demonstrated with simple arithmetic and logic? Because deflation is bad for the Con-Men themselves.

What happens when there is deflation in any economy? Asset-bubbles immediately implode, and Ponzi-schemes collapse. Deflation is a cleansing force which purges all bad debt (and fraud) out of any economy. Deflation is viewed by these Bankers as the Ultimate Evil because they are the ultimate Con Men.

This is demonstrated conclusively by examining merely one facet of their serial fraud: the derivatives market. Most people know of the existence of the derivatives market, but (surprise! surprise!) almost no one knows what it is, because (surprise! surprise!) the Bankers who run this “market” never define it so that people can see it for what it really is.

As with inflation; the actual truth is simple. “Derivatives” are nothing more than bets; bets about literally anything and everything in the world today. Once we define derivatives; it becomes immediately obvious what the derivatives market (a “market” for bets) actually is: it is a gigantic casino.

But this isn’t any ordinary, gigantic casino. It is a Crooked Casino, operated by known criminals. Again, proof is easily supplied. During the Greek “debt-default” (which, in fact, was caused by themanipulation of derivatives); the Banksters operating the Derivatives Casino simply refused to pay-out to all the Gamblers who had made huge bets that Greece would default.

Such gambling is known by the euphemism “credit-default swap”; and until recently all such gambling was illegal in the United States – based on anti-gambling laws. Why did the Banksters refuse to pay-out on their own bad bets?

Because the derivatives market is no ordinary Crooked Casino. Rather, it is a paper Ponzi-scheme which has swelled to somewhere in excess of twenty times the size of the entire global economy. We’re not sure precisely how large it is, because (surprise! surprise!) the Banksters changed their “definition” of this Casino a few years ago – causing it to instantly shrink (in nominal terms) to less than half its previous size.

How could even a Crooked Casino swell to such an obscene size? Because it has been leveraged and re-leveraged with $trillions upon $trillions of newly-printed paper currencies – the same paper currencies (and money-printing) which these Banksters use to create inflation (and devalue our currencies).

Finally, we see the tip-of-the-iceberg of this gigantic scam (and Lie). Why do the Banksters like inflation so much? Because they are the recipients of all these $trillions in newly-printed paper: totally/absolutely free money. Would you lie to people if it meant receiving $trillions in free money…every year?

The Banksters then use these $trillions to place new bets (and re-leverage their old bets) in their Derivatives Casino, and also to scam us. Indeed, as the previous chart reveals; inflation itself is one of their biggest Scams. They hand themselves $trillions in free money every year; our paycheques shrink every day of every year – as a direct consequence of that money-printing/currency-dilution.

The more they print, the more/faster they can gamble and steal (from us). The consequence of 40+ years of this stealing-and-lying is that the U.S. (and Western) standard of living has fallen by roughly 2/3 over that period of time.

“Not good enough,” asserts B.S. Bernanke, and his Bankster buddies. They want “more inflation” – so they can gamble even more recklessly/voraciously, while we get poorer and poorer, faster and faster.

This is merely a tiny sliver of what is behind the Great Inflation Lie. But with a Corporate Media monopoly, whose Drones parrot this Lie “24/7” as a monolithic herd; the Banksters (and our governments) have been free to perpetuate this Lie with impunity.

By their very nature; all Ponzi-schemes implode. The longer they are propped-up/perpetrated; the more-devastating the subsequent collapse. The Banksters have used their Great Inflation Lie to create the Mother of All Ponzi-schemes: the derivatives market.

As the (familiar) chart below illustrates; it is a Ponzi-scheme which is obviously on the verge of an Apocalyptic implosion/explosion. It can only be extended (even briefly) through even more insane/excessive money-printing.

The “good news” is that the latest Act of “The U.S. Debt-Ceiling Farce” has mercifully ended, and the curtain has come down on this puppet-theater. The bad news is that it ended (absurdly) with a mere three-month reprieve – before we get literally an instant replay of this contrived posturing and puffery.

Apart from the outrageous irresponsibility of the U.S.’s elected representatives staging these contrived “crises” (instead of doing their jobs); these quasi “shutdowns” of the U.S. government do serious short-term harm to the already-crippled U.S. economy – meaning medium- and long-term economic consequences from this staged theater. Yet as the dust settles from the latest Act; we see essentially zero reaction in the international financial community (with one, small exception).

The world’s largest economy, sitting with the largest debts and largest deficits in the History of the World openly “debates” whether or not to continue paying its bills, it ends up (supposedly) only hours away from official debt-default, and there is no reaction? Having regularly used words such as “drones” and “parrots” to characterize the ever-vigilant minions of the Western, Corporate Media; this one event alone provides absolute vindication.

During the worst days of the “Euro Debt-Crisis” (so far); European governments received regular downgrades to their sovereign debt on only the flimsiest of pretexts, sometimes due to nothing more than the (fraudulent) manipulation of credit-default swap rates on that debt (i.e. the multi-trillion dollar bets made that these governments will default on that debt).

The “insurance market” (credit default swaps) for the debt of many European debtors is greater than the actual debts themselves. The Tail does “wag the Dog” in our crime-ridden financial markets. And by fraudulently manipulating credit-default swap rates; Western banksters can (and do) manufacture downgrades on Euro economies (or vice versa) – and by doing so, they can drive interest rates to literally any number they desire…but they don’t do this in the USA.

With the U.S. government a mere hours away from debt-default, and sitting with (in actual fact) more than $200 trillion in debts/obligations; the U.S.’s Teflon, “AAA” credit rating remains intact. An economy which the Chairman of the Federal Reserve has now acknowledged is a Ponzi-scheme, retains a carved-in-stone “AAA” credit rating.

The obvious question is: would/will the U.S. economy be “downgraded” at all after it defaults on its astronomical debts and liabilities?

For those comatose members of the general public who still snicker whenever they see/hear the word “conspiracy”; spend just two minutes observing the Ultimate Accomplices of financial crime: the Western credit-rating agencies. Right up until (literally) the day after the made-in-Wall-Street U.S. housing bubble imploded; these credit rating Accomplices were rubber-stamping virtually all of the Bankster’s “securitized” mortgage-fraud products “AAA”.

This was ratings fraud: ratings agencies selling these (bogus) “AAA” ratings to Wall Street – which those Banksters then used to lure-in chumps for $trillions in securities fraud. And there wasn’t even any attempt made to hide the fraud. The ratings agencies openly acknowledged that they allowed their “clients” (the Wall Street Banksters) to tell them how to rate their fraud-products.

Not only did these (so-called) “credit rating” agencies not even employ enough staff to thoroughly/properly examine all the “products” on which they issued ratings; they openly acknowledged that they didn’t even understand some of the more convoluted Wall Street scams – and so they simply accepted the Bankster’s own explanations, essentially allowing them to “rate” their own fraud-products.

One obvious question arises: how do companies selling phony ratings on fraudulent financial products even remain in business? The answer to that question comes in the disingenuous legal defense which has been (successfully) used by these Accomplices when they have been sued over their bogus “ratings”: the small-print disclaimer at the bottom of all these constantly-hyped “credit ratings” dispensed by these companies.

It turns out that the credit ratings of the world’s most prestigious credit rating agencies are purely for entertainment purposes – and (supposedly) they aren’t intended to actually be used in conducting business (i.e. buying and selling the financial products these companies rate).

Investors (i.e Chumps) think they are obtaining some sort of “financial warranty” with these credit ratings, when (according to the ratings agencies themselves) their credit ratings have no more significance than attaching a Happy-Face “sticker”. Let me summarize the scam operated by the One Bank with its credit-ratings tentacle by providing a generic illustration of this scam in action:

THIS IS THE MOST-IMPORTANT RATING IN THE WORLD [credit rating]…

[fine print at the bottom:] Just kidding!

So (when it wants to) the One Bank uses these credit ratings as pretexts (or cover) for whatever market-manipulation it chooses to perpetrate – generally markets highly sensitive to interest rates; since those numbers can be fixed precisely through these bogus ratings. The rest of the time; these “credit ratings” are treated as what they really are: garbage.

Even the Corporate Media inadvertently blurted out the dirty-little-secret of these credit ratings agencies. For the last forty years; the credit ratings of Western credit ratings agencies have been totally irrelevant with respect to sovereign debt markets:

…Bond investors needn’t worry that a rating cut will hurt returns. About half the time, government bond yields move in the opposite direction suggested by new ratings, according to data compiled by Bloomberg on 314 upgrades, downgrades, and outlook changes going back to 1974. [emphasis mine]

Let me restate this to properly explain its importance. For the past forty years; there has been virtually zero correlation between Western credit ratings and the direction of interest rates derived from those ratings. They are treated as totally irrelevant junk, by companies which explicitly state that no one should ever rely upon their ratings, and by the marketplace as a whole.

Yet the same Corporate Media which compiled this data seemed to experience amnesia when discussing these very same credit ratings during the “Euro Debt Crisis” (and Wall Street’s economic terrorism that accompanied it). When the One Bank wanted to drive Greece into bankruptcy, and several other European nations to near-bankruptcy; the process was simple and repetitive.

First the credit-ratings tentacle would issue a “downgrade” on the debt of a particular Euro nation; parroted by a Corporate Media which treated (and continues to treat) these ratings as the Final Word on everything.

Then the Big Bank tentacle would use that downgrade as an excuse to manipulate credit-default swap rates much, much higher on this Euro debt. Then the Bond-Trading tentacle would use the (phony) credit rating and the (manipulated) credit-default swap rate as “justification” for demanding much higher rates of interest – via the bond-auction process.

When you are a financial entity which (by itself) controls 40% of the global economy – and thusall of the “moving parts” in this scam – perpetrating economic terrorism of this nature is Child’s Play.

This brings us to the U.S. Debt-Ceiling Farce, and the fraud-by-omission of these credit ratings agencies; the refusal to downgrade the U.S. after the non-deal which just took place. Only a totally Machiavellian propaganda machine could characterize the U.S.’s Political Puppetsagreeing to disagree as a “deal”.

Because they couldn’t agree on anything; the two platoons of Puppets just postponed their squabbling for three months. And in order to do so; they simply (but only temporarily) erased the totally arbitrary/totally unnecessary “debt ceiling”. Yet here is how one of the One Bank’s credit ratings mouthpieces characterized this same Farce, in refusing to alter its phony (and irrelevant) “AAA” credit rating on U.S. sovereign debt:

Moody’s Investors Service struck a “glass half full” view of the U.S. political showdown, saying the last-minute deal to avert a debt-ceiling collision signals politicians will ensure the government meets its obligations to creditors…

In fact; this is exactly the opposite of what we see before us. The Hatfields and McCoys were nowhere close to agreeing on anything, but unlike previous Acts of “The Farce”; they only postponed the next Act by three months, instead of the usual 12 to 24 months.

In no possible world could this be interpreted as politicians acting in a responsible manner toward the U.S.’s multi-trillion dollar creditors. Rather; it shows an obvious intention to stage the next exercise in brinksmanship as soon as possible. And if the Puppets weren’t intending to take breaks to stuff themselves silly with turkey twice in the interim; the next “showdown” would have likely come even sooner.

Responsible debtors do not ever play “Russian Roulette” with their creditors when it comes to choosing to default on debt. None but the most-irresponsible of Debtors would ever schedulesuch games of Russian Roulette. And now with the Puppets scheduling their Roulette even more frequently; we have a nonsensical (and irrelevant) ratings agencies applauding their responsibility.

But there was one (as yet) quiet voice which did not sing along with the Western media’s fantasy-chorus. The discussion of the significance of that Dissenting Voice will take place in a sequel to this commentary.

Source