Economic propaganda tubes spend hundreds of millions of dollars daily to make sure that Americans are deeply confused about domestic and world economy. Financial gurus, brain damaged former football players, brilliant retards who distinguished themselves by losing half of their inherited fortunes, not to mention professionally lying media types, all working hard to mess with our heads. Unfortunately, they are succeeding all to often. Below I will attempt to rectify that situation and clarify basic economic terms, victims of daily rape by erectilely dysfunctional celebrities of greed.
First, before even trying to understand any economic data, often quoted economic indexes are all virtually made-up by some random guys, rarely with Ph.Ds. These indexes suppose to be invariant (conserved) but they are purposefully not. All are defined in ways that completely precludes their usefulness as any measure of economic condition in the USA and abroad especially during periods of depression or financial instability. Instead, they are just propaganda tools developed in order to sway public opinion towards certain actions or inaction which would benefit, in minute details, current demands of ruling class while often cause complete disaster for ordinary Americans.
These empty utterances supposedly about economy serve only to obscure daily reality of ripping off hundreds of millions of gullible people who believe in financial economics as a rational science, and that economic outcomes should be accepted as laws of nature. In fact what we’re dealing with, are not laws of nature at all but as Adam Smith wrote, deliberate, precise policies of oligarchic ruling elites disguised as fiscal, monetary, economic, financial strategies in order to confuse meddlesome spectators i.e. people who work for living, about rulers cruel intentions.
Also we will not be able to comprehend anything if we do not realize that we have here in the US (and in the world), bifurcated economic and state systems, two Americas, with different economies and laws exactly like in medieval times. In First America, you steal billion $ you get a medal and round of golf with president, in other, Second America you steal yogurt for your hungry, sick child or sell cigarettes for living, you lose you freedom and become incarcerated slave or if you lucky you get choked to death.
In the context of dual reality we may define commonly invoked terms of inflation/deflation as result of deliberate political process. In paranoid delusions of heavenly, sacrosanct “free” market, to which the above terms suppose to refer to, the only invisible hand is a hand of First America oligarchs groping you and at the same time steeling from your pockets, while satisfying their sexual perversion with impunity.
Another cruel myth peddled by oligarchs is apparent supply & demand “law” which is plain lie. There is no such a thing. There is nothing that compels real economy into supply/demand balance. Supply or demand side economics are both unqualified fallacies. The balance between supply & demand is rare, temporary and mostly unreachable in real economy. And if such balance is “artificially” achieved, it is solely a result of market manipulation of dominant market players supported by propaganda of so-called price discovery and certainly not a result of natural law of economy/society since no such laws exist.
In ideal, non-existent free market, price point is stable and unchanged since it always matches precisely market value and consequently no profit or margin is possible since market is purely transparent. Even changes in fundamentals of the asset market value would not change anything except instantly switching to new price point to match new market value due to 100% transparency. Ideal, free markets, worshiped by disciples of free market capitalism, are dead and useless. The real market profits are all based on cronyism and insider trading, lying or withholding market data. There is no other way to make money in real markets but by illicit activities. See below one scenario.
The price points at real markets are determined by following man-made procedure or similar. The weak buyer, is always extorted by strong seller and is coerced to pay demanded, high price, regardless of exchange value of the widget. The strong buyer extorts weak seller to pay demanded, low price regardless of exchange value of the widget.
Who is strong and who is weak market player? That’s set by deliberate policy of ruling elites who choose winners and losers in no relation to virtue of participating individual or organizational market players. It would be superfluous to add that strong buyers and strong sellers are those who run real marketplaces and making all the profit using all visible hands, often armed with guns or government connections. What’s left “free” in real market is nosebleed or worse for those who demand honesty and fairness.
In order to even begin to talk about inflation/deflation, which is wrongly defined as rise/fall of nominal prices of market assets, we need to ask: inflation/deflation of what? Relative to what? Expressed how? In whose interest or benefit? And at what market, run by whom?
See below two examples:
if increase of nominal prices is smaller than increase of nominal wages/benefits/disposable income. Is it inflation or deflation in real terms? The nominal prices rise but we still have deflation since purchasing power of people increases. Is this bad for people their Second America economy?
If decrease of nominal prices is smaller that decrease in nominal wages/benefits/disposable income. Is it inflation or deflation in real terms? We have inflation since purchasing power of people decreased. Is this good for people and their Second America economy?
Yes, we can have “real term” inflation while nominal price levels decrease that’s what is causing confusion among First America economists trying to put veil over our eyes and ignore consequences of their own doing.
Therefore, consideration of solely nominal value of purchasing power of an individual and ignoring combined real purchasing power of 99%, is utter nonsense, manipulative play of words that only confuses issue of price levels.
Printing money does not cause automatically inflation nor forces raising interest rates i.e. withdrawing freshly printed money from the system. It may even cause deflation in rising debt and declining income environment of Second America if new money is never used for main street investments but only to cover TBTF banks risky derivative bets within financial world of illusion (First America) where scribble on a piece of paper (corporate, sovereign bond) is “worth” billions $.
The political economy is and always was about one thing, choosing winners (First America) and losers (Second America) for purely political reasons and only for purpose of holding on to power by whatever means available.