Debasement Leads to Inflation
Posted by Orrin Woodward on September 26, 2013
Yesterday, I shared what debasement of the money supply was. Today, I am going to share what it leads to – a secret tax called inflation. I know this can be complicated stuff and some of my readers may have to read it several times, but the reader’s liberty and justice are at stake, so I encourage all to keep slogging through. 🙂 LIFE Leadership is creating a group of men and women who seek truth so they can act upon it. The LeaderShift is coming!
Sincerely.
Debasement Leads to Inflation
German Hyper-Inflation
Nonetheless, this gain to the state’s coffers is no free lunch; rather, society pays in full for the state’s abuse of its powers. For debasement leads to a hidden tax on society’s members known as inflation. Society’s members recognize that prices are rising, but cannot identify its true cause. Ignobly, the government, instead of ensuring justice through protecting society against fraud and counterfeiters, has entered the counterfeiting business to benefit the ruling elite. To be sure, the government hammers anyone else attempting to benefit at society’s expense through the printing of fake dollars that cause inflation within society. Evidently, however, this aggressive government action is less about ensuring justice and more about ensuring the exclusive rights on the systematic counterfeiting fraud. Furthermore, since inflation is a disguised tax upon society, it is one of the safest methods of exploitation. Rothbard observed:
Direct, overt taxation raises hackles and can cause revolution; inflationary increases of the money supply can fool the public— its victims—for centuries. Only when its paper money has been accepted for a long while is the government ready to take the final inflationary step: making it irredeemable, cutting the link with the gold. After calling its dollar bills equivalent to 1/20 gold ounce for many years, and having built up the customary usage of the paper dollar as money, the government can then boldly and brazenly sever the link with gold, and then simply start referring to the dollar bill as money itself. Gold then becomes a mere commodity, and the only money is paper tickets issued by the government. The gold standard has become an arbitrary fiat standard. The government, of course, is now in seventh heaven. So long as paper money was redeemable in gold, the government had to be careful how many dollars it printed. If, for example, the government has a stock of $30 billion in gold, and keeps issuing more paper dollars redeemable in that gold, at a certain point, the public might start getting worried and call upon the government for redemption. If it wants to stay on the gold standard, the embarrassed government might have to contract the number of dollars in circulation: by spending less than it receives, and buying back and burning the paper notes. No government wants to do anything like that.
Manipulation of Money Supply
Simply stated, inflation, through society’s ignorance, allows exploiters to bilk society with little resistance. Governments, in effect, as they transform into powerful states, promote monetary sophisms to disguise its scheme of systematic exploitation of the nation’s money supply. Indeed, without public acceptance of the state’s control of the monetary system the Five Laws of Decline would be severely limited. Unfortunately, however, most of society’s members remain ignorant of monetary matters, leaving them susceptible to state propaganda. For the state and its servants argue that, since all production is good and increases wealth, the state must increase the money supply to increase wealth in society. The fallacy, however, in this argument is, unlike all other consumer goods, money is not used up in the consumption or production process. True, it is indispensable to both steps, but only as a medium of exchange for goods and services. To quote Rothbard one more time:
Unlike consumer or capital goods, we cannot say that the more money in circulation the better. In fact, since money only performs an exchange function, we can assert with the Ricardians and with Ludwig von Mises that any supply of money will be equally optimal with any other. In short, it doesn’t matter what the money supply may be; every M will be just as good as any other for performing its cash balance exchange function.
Society, in other words, can practically use any stable non-manipulated money supply level to use in its role as a medium of exchange for all other goods and services; however, the exploiters resist this economic truth for they cannot manipulate a money supply operating within free market environment. Accordingly, the state utilizes all the means at its disposal to gain control of a nation’s money thus ensuring its ability to exploit society. Interestingly, American President James Garfield emphasized the FLD risk when the state’s “monopoly of force” controlled the money supply when he declared, “He who controls the money supply of a nation controls the nation.” Garfield understood that, since money is the lifeblood of the entire economy, when the state is given control of the economy’s blood, it controls its life. For if the money supply can be expanded and contracted at will, the state can bankrupt any person, business, or political rival it chooses. Perhaps the simplest way to clear the fog on the false reasoning of financial elites is to ask: in what other field would it be proper for government to cartelize the entire field and claim the procedure is for society’s benefit?
For instance, if a monopoly was delegated complete control over car manufacturing in the USA, would that improve or hinder the quality, quantity, and price of future cars? Historically, when competition is reduced, so is the quality. In fact the only thing that increases is the price. All of this, in short, because the monopoly has no competitors for customers to flock to when the entity is unresponsive to their needs. However, if monopolies and cartels are damaging to the Six Duties of Society in every other field, why does the state/financial elites insist on making an exception when it comes to banking and the money supply? Indeed, because the money supply is used for all other businesses transactions within society, the monopoly control over the monetary policy indirectly allows one to control all other economic activities. This is summum bonum for exploiters, allowing them to profit through foreknowledge of the inflation and deflation cycles under their control. In fact, for society to remain free, there is no greater assignment for the people than to ensure the FLD do not infect the nation’s money supply. Paradoxically, however, in no area of society is the state given a freer reign than in the nation’s money supply. In consequence, since men are not angels, the FLD temptation to expropriate the wealth of society is too great for the state’s rulers to resist.
23 Responses to “Debasement Leads to Inflation”
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Bob said
Great article! I find it amazing that the majority of economists, professors & decision making bodies do not understand this which only perpetuates the misinformation to the public. Life Leadership-leading people to the truth!!!
looking forward to your next book.
Bob
Rick Craig said
Orrin,
Thanks again for another fantastic post! I completely agree with you. It has me scratching my head in bewilderment trying to understand how the Fed Reserve was even allowed to keep breathing. True, its creation was done behind closed doors, yet in 1933 the Constitution still read ‘The Congress shall have Power To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures’ The members of Congress in ’33 violated their oath by turning over the monetary powers to a foreign interest, namely international banking cabels, releasing themselves from one of the most important inumerated duties! A nation that looses control of its money is left wide open to attack by those that now control it.
I love LIFE Leadership for so many reasons! None the least is the wealth of teaching taking place on the sacred topic of freedom! Thanks for breathing LIFE into so many and for the passion you display while doing it!
God bless!
Rick C
Deedee Bossladyen said
Wow!!, what a message!!
I don’t understand if I were to print my own money , it’s a federal offense n serious prison time. Why aren’t these bankers aren’t serving prison time for that same fraud?
Please explain….
George said
Orrin, thank you for sharing the truth. It is our raw material to use to make a difference in the world. Count me in on making a difference. George
Bart Springer said
Thank you Orrin. This information is a lamp in the darkness. Remember last summer (2013) and the media talk of a trillion dollar coin? This would be equivalent to the hundred million mark notes illustrated. If such a “coin” is ever minted it will be the tolling bell for the final demise of the US dollar. A final recognition by the government that the dollar is completely fiat.
Rory Sayers said
It will be a joyous day when critical mass understands the truth of the monetary monopoly imposed on it and returns to free-market economic exchanges. March on to ONE MILLION!
The alternative will be the denial of production from which they extract their leisure and the violence that will ensue.
I heard it said another way. “We can do this the easy way or the hard way” Which would you prefer?
I for one like the proactive approach.
Lead on Brother!!
Olivier Jean-Baptiste said
Orrin…
I have to confess : Facing the truth about human nature disturbing me deeply.
Thanks to your influence, the more I research and study the history of the western civilization the more I discover the veracity of the second of the FLD (Bastiat’s law) being confirmed over and over. Even if it eventually causes self-destruction, many will give in to that law. I think it has a lot to do with ignorance and selfishness. The former is a mind issue and the latter is a heart issue. The Trade Cycle Theory of the Austrian school has proven that the boom and bust cycle that has destroy so much wealth find is it roots in the tampering of the money supply. Yet policy and decision maker around the globe are completely ignoring the basic economic law of supply and demand and are artificially pupping money out of thin air and expecting it to create wealth when in reality it is only plummeting the buying power of the citizenry while profiteering a few of banksters.
I now understand better that freedom and prosperity has to be constantly fought for and guarded by man of virtue and courage implicated in production and/or leadership.
thank,
Olivier
Don Schultz, Team VIP Phalanx said
Thank you for the education you provide Orrin,
I remember Bob MeEwen saying one time that “the greater the taxation of a people, the greater their loss of freedom”. Your article clearly explains that factor of money, the government and “We the People”. If people understood how egregious our taxation system was and the manipulation of our money supply there would be an uprising.
As you and Oliver DeMille talk about in “LeaderShift” the only way we as a nation will ever regain the ground we have lost is for we as citizens learn and be educated about the basics of our nation and almost nothing is more basic than money, other than principle-based components of our nation.
Richard Kroll Jr. said
Orrin… great explanation of the “hidden tax” of inflation! And how debasement leads to inflation.
I had to look up the word “expropriate,” but it is an excellent choice of words for what you are explaining: to take property or money from somebody, either legally for the public good or illegally by theft or fraud.
Unfortunately, the state is “legally” taking from ‘We the People’ for what in actuality is “theft and fraud”!
Steve Duba said
Thanks Orrin. I responded to an e-mail recently blaming President Obama for the health care mess. My only thought for this person when they blamed the people for voting for him was that it wasn’t their fault,it was the 50% of America that did not even participate in the election that are truly responsible. When we begin to become part of the solution in our country,things will change. That’s why I am so proud to be in this noble Leadershift we are about to embark on.
Thanks Orrin and God Bless
Rob Robson said
Orrin, I can’t tell you how excited I am to be able to get such clear and compelling language to the masses! It seems so clear to me that there is only two major philosophies’;
1. The will of the majority trumps any individual right. Or-
2. ALL men and women are born free and have the right to their life, liberty, and property. Government is our servant and has been granted the authority to act in proxy in our behalf. Government uses violence (or the threat of violence) to enforce all laws. Therefore, we can only legislate things that each of us, individually has the right to use violence against our neighbor to enforce personally.
The adoption of the first philosophy has empowered tyrants to enslave and murder hundreds of millions of people throughout the ages. The implementation of the 2nd philosophy has created the greatest amount of peace and prosperity ever experienced in human history.
I feel so blessed to be part of this choice community that has the opportunity to turn the tides from the steady creep of tyranny to a rebirth of freedom! Fired Up!
Elizabeth Sieracki said
Thank you Orrin. Most definitely a double (maybe even triple) read. Thank you for all the time and energy you put into simplifying concepts and speaking truth.
Chad said
Hi Orrin!
Give me more! Educate what we’ve been missing! I love to learn and wow a touchy subject but one that has been abused and “governed” way to long! Let’s spread the word and with the way you explain we can get to the average person today who chose yesterday to ignore!
God Bless!
Randy Robson said
Well done!
Elaine Mallios said
Oh – I see. We are in serious shape. Thanks for all your research and sharing this. Keep it coming!
Keith Sieracki said
Great post Orrin! How is monetary control any different if an airline were to “reward” a customer with frequent flyer points, then simply decrease the value of those points at will.
How can the average American fight this governmental control besides creating defensive finances( saving more) to cover the higher cost of items when buying power decreases? Invest in bitcoins??
Kristen Seidl said
Crazy crazy Orrin! Keep em coming – such important topics that I know so little about (and want to be educated on).
Steve Meixner said
Orrin, Wow, you sure are dishing out a lot of Truth here!
Steve
KellyJack Nelson said
What a prime example of what you and Oliver give us solutions to in Leadershift! Thanks for giving us something we can offer as hope to those who see the truth and feel beaten by the enormity of it.
David Fidler said
Great article that more people must understand.
While I have been somewhat familiar with these concepts for some time (thanks to LIFE products as well as other readings) I am still somewhat perplexed at this point as to why we aren’t seeing massive inflation rates at this time. I recognize that many basic consumer products have gone up in price to some extent in spite of the governments insistence that inflation is at or under 2%, I would expect a much higher rate of inflation; to the tune of 50% to 100% or more. In the past 4 years, starting in mid 2008, our monetary (M1) supply has gone from just over $800 million to $3.3 Billion. Additionally the Fed is pumping some $85 Billion a month into the stock/bond markets (electronic dollars) each and every month. So why isn’t inflation rocketing to triple or quadruple digit inflation rates? How is the government hiding all of this and keeping both the official as well as the real inflation rates so low?
Steve Leurquin said
I’m not going to lie, my brain hurts from reading your last two posts! I pray that more people open their eyes and get some “headaches” to the truth that is all around them. My fear is that reading and learning the truth like your posts is tough to compete with entertainment wise when the “game of the week” is on every single night! Thanks for taking on the competition.
Dave Hall said
Well said Orrin. Praying and working for a true awakening to these truthes in America.
SJ Barakony said
Hello there!
This was the only recent post that I thought sharing these 4 vid clips made sense with/on 😀
These were shared with me by a fellow who is on the right track for sure – I wonder if you’ve seen these before, Orrin?
All are very insightful – esp. the 4th and final – from my self-directed educational perspective.
http://youtu.be/iFDe5kUUyT0
http://youtu.be/y-IemeM-Ado
http://youtu.be/EdSq5H7awi8
http://youtu.be/DyV0OfU3-FU
Many blessings from the community! God be with you & your family every day. Happy Thanksgiving!