What Is "The True Cause" Of Inflation?

The ever-shrinking United States Dollar.

As bad as the United States Dollar looked in the year 2000, as compared to 1774, the last ten years has thinned it to a very thin sliver of its former glory. In fact, it now takes a great number of dollars - in order to [merely] feed one's self for the month! But, how did this situation ultimately come about?  Is it merely: "Supply and Demand Working Itself Out In The Free Markets" - as we've been [so frequently] told... or, is there just a little bit more to it? What is "The True Cause" Of Inflation?

 For decades Americans have been taught that Inflation is simply the natural result of: Shortages In Productive Supply, in relation to, Increased Consumer Demand. When Consumer Demand outstrips Productive Supply, then the pricing will move higher to properly balance these two competing economic forces! This much is factually true. However, such Causative Shortages are merely short term aberrations in the markets, since these higher prices soon bring about an increase in New Productive Capacities. Consequently, consumer pricing will eventually return to its previously expected economic levels. The only exception to this rule, honestly being, a Genuine Raw Material Shortage - which is very seldom [honestly] the case.


Contrary to popular opinion, we are not suffering any of the Raw Material Shortages - as predicted by the "Overpopulation Crowd" - for the last four hundred years. So far, the Earth has [always] met our incredible needs - for everything - in remarkable abundance! There Are No Factual Shortages for: Food, Water, Clothing, Oil, Glass, Heavy Metals, Plastics, etc.... Every Current Situational Shortage, occurring today, is the result of either: Dysfunctional Political Policies, Manipulative Market Economics, Humanly Inflicted Warfare, and/or Excessive Political Corruption. This is not to say, that they cannot one day happen - due to Evironmentally Destructive Policies - but, it definitely hasn't occurred yet!

Another Cause For Inflation is Economic Pressure From Labor  - for Wage Increases and/or Better Benefits, unjustified by equivalent Modern Technological Efficiencies. This usually occurs due to an "Over-Heating Economy;" and the majority of all businesses having to compete in an excessively "Tight Labor Market." However, since Real American Wages fell from: eleven percent of Total Productive Cost in 1968, to approximately two percent of Total Productive Cost by the year 2000 - we have experienced tremendous Deflationary Labor Pressure, during our single greatest Inflationary Period! Nor, does this factor in the almost 1000 percent increase in National Economic Efficiency - over the very same 40 year period.   

A Third Cause For Inflation is: Federal, State, and Local Taxation ... as Capital Gains, Income, and Property Taxes are increased upon everyone, our natural human tendency is to pass the problem onto someone else! Thus: Higher Property Taxes upon The Landlord - raises the cost of our monthly rent bills; and [not so surprisingly] Higher Corporate Income Taxes are either: Passed On As Higher Consumer Prices, or Wage and/or Benefit Cuts. However whenever the markets [factually] preclude such Practical Economic Adjustments, a new and cheaper source of labor must be sought - in order to remain [quite honestly] competitive. Thus, we are witnessing a "Mass Exodus Of American Industry" to cheaper foreign markets.

Eventually, however, even this cause of Inflation is largely of a Temporary Nature, as these newer and much cheaper sources of labor - combined with decreased consumer demand - lead to inevitable Deflationary Economic Pressures. The few exceptions being in: Property and Physical Service Related Industries - which cannot relocate, or outsource their ongoing expenses as effectively. Albeit, they are certainly trying, by pressuring our politicians and paying for increasing amounts of Illegal Laborers [on the bottom] and pressuring them for even more H1B Visas [at the top]. This is only to be expected, as our economy increasingly unravels because of such Politically Generated Economic Pressures.

The Final Cause Of Inflation is entirely due to: "Unrestrained" Monetary Policy. Money, like any other commodity, is governed by The Economic Laws Of Supply And Demand. When very little of it is actually in circulation - usually due to backing it with "Real Coin" [aka Precious Metals] - its value is rock solid over great expanses of time... but, when massive amounts of it are in circulation - usually due to the "Quantitative Easing" of [seemingly clever] Central Bankers - its value decreases dramatically over relatively short periods. Moreover, this is the most permanent and static cause for Monetary Inflation conceivable - since it is exceptionally difficult [and horrifically expensive] to actually rein in - once it is started!

Just as Drug Addicts need increasing amounts of their drugs to get The Very Same High, Keynesian Economists invariably require ever more currency in order to jump start a Dysfunctional and/or Crashing Economy... and at some point, the amount necessary will destroy that currency altogether as everyone finally wakes up and realizes its True Relative Value - with respect to their own goods and services. It is this short [and final] period of Super Inflation, that we know as: "An Economic Hyper-Inflationary Period." It can end in only one way; and no nation really wants to go through it!

Of course, America is fixing to do just that, thanks to the ongoing efforts of both: The Democrats and Republicans over the last Keynesian Dominated Century. With one "Monetary Shot" following the next, Our Domestic Economy is horrendously suffering from "The Shakes..." and Fed Chairman Ben Bernanke is now preparing to administer "The Overdose" - necessary to quelling the negative effects from "Our Ongoing Economic Withdrawal!"

The reason, that I chose to utilize such terms, should be obvious - because the analogy is actually quite appropriate. Particularly, since these Political and Economic "Junkies" are now far beyond reasoning with - in any rational way. The question is no longer: "Will They Do It..." but, rather: "How Long Before They Do?" Personally, I'm betting within the next two years; and quite possibly sooner. And yet, only time will tell....

Consider The Real Problems We're Now Facing:

• The Dysfunctional Policies From Generations Of Short Term Thinking Politicians.
• America's Economy Currently Contracted Below Sustainable Economic Levels.
• Tax Receipts Far Lower Than Expended Revenues - As Far As The Eye Can See. 
• An Un-Payable Federal Debt Load - It Exceeds All Known National Assets. 
• A Massive And Overpaid National Bureaucracy - They Make Twice As Much As The Average American.
• A Massive Dependent Social Class - Thanks To Our "Great Society" Politicians.
• Two Fifths Of Our Workers Currently Retiring - Due To The Baby Boom And Exceptionally Low Birth Rates Ever Since.
• Virtually No Domestic Manufacturing Base - Since Most Have Already Quietly Fled Our Shores.

If they wouldn't face the underlying Political and Economic Issues before - when those corrections would have been far easier to do - what makes us [honestly] think that they shall go through them now, without the necessity of an Actual Economic Collapse? Moreover, there is substantial physical evidence to indicate that all of this was committed both: willfully and intentionally - in order to accomplish their International Political and Economic Agenda. There is a reason why we keep hearing about: "The New World Order" - after all... and they are working overtime together to achieve it! Just a thought, from "The Real American."