The Nomad Economist: Inflation is Theft, Taxation is Robbery


The Nomad Economist
Jan 27, 2022

Inflation is directly proportional to the money that is produced out of thin air within a fractional reserve banking system. No other result is ultimately possible. Inflation is a slow robbery that does two things. It devalues savings and inflates asset prices, forcing people to spend and gamble.

It stimulates consumption; on a planet where everything is finite. Inflation completely warps supply and demand and over time, leads to shortages of essentials and overproduction of garbage.

 Inflation exists as one of many wealth transfer mechanisms. It’s a casino where some do win, but only at the expense of someone else losing.

 And of course, the parasite institutions get to collect a convenience fee for doing god’s work. Supposedly taxes are collected for the privilege of us using the Fed’s money. Yet somehow even transactions not involving fiat are taxed equally.

Even if you barter, you supposed to pay taxes issued in the currency that was nowhere near during the exchange. I mean, come on. We all know that the foundation of the modern economy rests on lies upon lies.

Instead of maintaining equilibrium, inflation favors growth. When growth stops, everything collapses. Money vanishes, and only assets remain. All the collateral pledged goes back to the bank when they yank the carpet. That’s what it’s all about.

The game auto-terminates when the bank owns everything there is, and in over 100 years of Fed’s existence, we’re almost there. It’s by design.

Here’s a strange headline for you: “Gold prices near-daily highs despite better-than-expected inflation in October.” This headline is bizarre on a couple of levels. First, since when are rising consumer prices and good news? And second, why wouldn’t inflation be good for gold? You really have to buy into the mainstream narratives to write that headline.

Consumer prices did, in fact, come in higher than expected in October, according to the latest Labor Department report. The Consumer Price Index increased by 0.4% last month. In the 12 months through October, CPI came in at 1.8%. Core CPI was up 2.3% after a 2.4% rise in September.

This is “better than expected.” Better. Think about that for a moment. The headline writer is telling you that having to spend about 2% more every year on healthcare, recreation, vehicles, and rent is right for you. Congratulations.

Of course, the reason the mainstream considers this good news is because the Federal Reserve intentionally tries to maintain a 2% inflation rate. Yes — the central bankers think it’s essential for your spending power to decrease every single year.

Mainstream pundits will also tell you that rising inflation is bad news for gold. The headline hinted at this fact. Gold was pushing daily highs “despite” the inflation report. This is because pundits expect the Federal Reserve won’t cut rates any more if inflation heats up. Heck, it may even raise rates.

This is entirely backward thinking. In the first place, while higher CPI data may slow the Fed’s roll-on rate cuts, Fed Chair Jerome Powell has already indicated he has no intention of raising rates, even if inflation heats up. He said that it would take a “really significant” and “persistent” move up in inflation before the central bank considers rate hikes.

Basically, Powell conceded that the Fed wasn’t going to be vigilant about inflation. As Peter Schiff put it in a recent podcast, rate hikes are the furthest thing from their mind. They’re not even considering raising rates right now. So, the only thing that they’ll do is cut rates or leave them alone. This is a very dovish stand for the Fed to take.

Probably the most dovish stance I’ve ever seen the Fed take with respect to its supposed tolerance for inflation. And regardless, despite what the Fed may or may not do, inflation is not bad news for gold.

Keep in mind; an interest rate is nothing but a price. It’s the price of money. When there is inflation, interest rates go up just like any other price.

Contrary to popular belief, this is not bad for gold. Quite the opposite, this is all bullish for gold.


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