Before we can talk about interest rates, we need to talk about inflation.
Inflation is a crime.
Inflation is a tax on the poor. Or rather, it’s straight-up robbery of their already-extremely-limited purchasing power.
Inflation also brutally punishes disciplined savers.
Inflation creates a culture of short-term thinking versus long-term planning, with psychological spillovers that affect our politics, relationships, sexuality, mental health, physical wellbeing, and ecological environment.
Inflation should be avoided at all costs.
But there’s a problem:
Our governments are run by sociopaths who love to print money.
The MMT Myth
Modern Monetary Theory cultists believe governments can and should print money out of thin air, so long as it doesn’t cause too much inflation.
So what do governments do?
They print money like crazy, then lie about the real inflation numbers so they can say “See, we’re printing free money and inflation is still just 2%!”
This criminal con has worked for quite a while now:
Homeowners enjoyed ever-rising house values without working
Stock speculators watched their portfolios rise without working
The parasite class rode the gently-inflating asset bubble without working
The working poor continued to struggle to survive, which meant corporations could keep their wages down
But during Covid, banksters pushed their rented politicians to print outrageous amounts of money.
It was a ruse to “help the people,” but it actually just added $5.5 trillion to the net worths of billionaires for doing nothing.
So how much did American politicians print since March 2020?
(The fact that this hasn’t caused riots in the streets is astounding.)
700% more money, but “only” <10% inflation?
Exactly ten years ago this month, there was less than $1 trillion in real M1 money stock in the American economy.
Today, that number is over $7 trillion.
Here’s what it looks like on the government website:
So in the past years, the amount of money in the economy has shot up 700%.
And government swore this wouldn’t cause massive inflation.
Now reality is setting in. [Editor’s note: Surviving Tomorrow called this over a year ago.]
Though they’re still lying about the actual numbers, real inflation is at least 10.84% if not significantly higher, and still predicted to rise much further.
It’s destroying savings, bankrupting the poor, causing house prices and rental prices to skyrocket, and it’s starving pensioners. Inflation is literally killing society and will continue to do so until we see a massive market reset.
But here’s the really sneaky thing:
Money-printing isn’t what causes inflation.
What actually causes inflation
“Today’s inflation — throughout the world, not only in the United States — is led by pure monopoly power, headed by energy and food prices.” — Economist Michael Hudson
Money-printing doesn’t cause inflation.
Money-printing just signals to sellers that there is more money in the economy, so they can get away with raising their prices.
So they do. (They also practice four other forms of inflation that almost no one knows about, but that’s a story for another day.)
When the same corporations who lobby-bribed their rented politicians to 7X the money supply in a decade got their way, they start putting up prices to capture a chunk of all that new printed money.
100% of price inflation on planet Earth is caused by sellers raising prices.
There is literally no other cause of inflation.
Prices do not go up unless sellers put the prices up.
For some strange reason, the majority of people on the far left and far right have an extremely hard time accepting this fact… and most people don’t even know why they have such a strong aversion and visceral reaction to it.
It’s because accepting reality will inevitably lead them to the truth behind the truth, the thing no one wants to admit:
That all inflation is caused by greed.
How to stop inflation
Getting rid of inflation is simply a matter of reverse-engineering your way out of the mess you created.
If printing money is what signaled sellers to raise their prices, then destroying money will signal sellers to lower their prices.
So how does one destroy money?
How does the government soak up all that printed money?
There are two major ways to do this:
The first is to massively tax whoever received most of that money
American billionaires increased their wealth by $5.5 trillion during the pandemic, and multinational corporations added tens of trillions to their market caps and hundreds of billions in hard profits.
But of course, we couldn’t dare tax those who benefit the most from corrupt government policies! We love unlimited wealth accumulation, no matter how many people have to suffer and die so that billionaires can add extra digits to their already overblown net worths.
In fact, it’s pretty clear that the Fed would rather let the poor starve under inflation or go bankrupt in a rate-induced market crash than taxing their corporate overlords.
The second way is to raise interest rates
When governments raise interest rates, borrowing becomes more expensive.
When borrowing becomes more expensive, people borrow less, which means they have less money to gamble on real estate and stocks and crypto, and less money to buy crap they don’t need at prices they can’t afford.
Boost the interest rate high enough, and price inflation not only drops but can disappear entirely.
We need to do whatever it takes to end the theft of purchasing power.
I hope the Fed keeps raising interest rates until inflation hits zero and stays at zero.
Zero inflation means the poor won’t be robbed of their already-severely-limited purchasing power.
Zero inflation means the savings of disciplined savers are protected from loss.
Zero inflation means no inflated real estate bubbles.
Zero inflation means no inflated stock market bubbles.
A world without inflation is entirely possible, and extremely desirable.
A world without inflation is more meritocratic.
A world without inflation abhors short-termism and plans for the future.
But who wants a world where the poor and working-class can flourish, where prices are affordable and stable, where savings and money retain their value, where merit and contribution actually matter to civilization?
Certainly not the parasites who are profiting from all this glorious inflation.
Jared A. Brock is an award-winning biographer, PBS documentarian, and the cell-free founder of the popular futurist blog Surviving Tomorrow, where he provides thoughtful people with contrarian perspectives on the corporatist anti-culture. His writing has appeared in Esquire, The Guardian, Smithsonian, USA Today, and TIME Magazine, and he has traveled to more than forty countries including North Korea. Join 21,000+ people who follow him on Medium, Twitter, and Substack.