My attention was drawn recently to a feel-good video from the IMF, that cheerfully walks us through the mysterious phenomenon of rising prices, at about a Sesame Street level of discourse.
Replete with circular logic and liberally sprinkled with the phrase “broad based”.
There is not a single mention of the money supply in the entire video.
However, I was mildly surprised to see an overt admission that if prices are going up faster than wages, people get poorer.
The cause of prices going up in the first place?
Two ways, according to the host (and she didn’t say “gradually, then suddenly”) – or rather, “two buckets.”
Bucket #1: is supply chain constraints – like what happened during and after COVID.
Bucket #2: is increasing consumer demand.
Except that’s the same thing. Both “buckets” are simply demand outstripping supply, and as I said, there is not one mention of the actual money supply in the entire video. I took the opportunity to email AskAnEconomist at the IMF to, well, ask an economist:
I’ll let you know if I hear back. The video came out last year (I just saw it on Twitter this month).
More recently, the BBC put out this thoughtful editorial on “Financial anxiety: The alarming side effect of inflation”, noting how,
“Worrying about finances is nothing new. But as inflation has taken hold, and the cost of living has spiked without wages keeping pace, more and more people are starting to panic about their money. Financial anxiety has set in for billions of people – including some who haven’t felt the acute pressure before.”
Also interesting to note the two follow-up articles on the page: one is about “shrinkflation” – paying the same price for reduced quantities or smaller packages – and also “skimpflation”, a new one to me, which denotes the practice of cutting services like having to bring bags, bag your own groceries, and do a lot of the schlep-work the business used to offer as part of their normal course operations.
What’s the common theme here? No mention of the money supply, not one, across all three articles.
Here in Canada, the Bank of Canada’s Third Quarter Consumer Expectations Report blamed media reporting on the subject for consumers’ expectations of inflation being “unusually high”
“the news coverage that people focus on may affect their perceptions of inflation. Consumers are more interested now in news about inflation than they were before the COVID‑19 pandemic. Interviews showed that respondents tend to focus on stories about how inflation continues to be higher than before the pandemic as opposed to stories on the easing of inflation.“
The report ruminates on how “The gap between consumers’ perceptions of inflation and the official data is unusually wide”, particularly for young people, especially since,
Yes, things like actually trying to buy goods and services with your money seems to be yielding different results than one would expect from the “officially reported inflation figures”, how can that be possible?
In Egypt, the government at least acknowledges the ravages of inflation, (currently running 37% – 38% annually), and is recommending the public suck it up and go
hungry.
In what is being billed as an “unofficial campaign speech” ahead of the presidential elections there, incumbent President Abdel Fattah el-Sisi (pictured here boarding a private jet), lectured the poors,
“Do not let your dream be merely a meal.” – and to accept hunger and privation in order to achieve progress and prosperity.
Somebody must have already forgotten that what triggered the Arab Spring in the first place, was cost of food inflation.
Time to spin up The Krugmeister himself to bring us home:
The war on inflation is over. We won, at very little cost pic.twitter.com/opumf3nEvL
— Paul Krugman (@paulkrugman) October 12, 2023
All this talk about inflation is moot, according to Nobel Laureate and New York Times columnist Paul Krugman.
The “War on Inflation is over. We Won”. Just so long as you don’t count: FOOD, ENERGY OR SHELTER, then the CPI is running a nice, comfortable, 2%, just like it’s supposed to be.
Even then, Krugman supports raising “the official inflation target” to 3%, which is only 1% higher, right? (Or it’s a 50% hike in the rate of devaluation).
That’s only a 50% hike in the rate of theft of the rabble’s purchasing power. https://t.co/fCv7fIyJVj
— DollarCollapse.com (@DollarCollapse) November 7, 2023
Having been recently approved as a Twitter/X Community Notes moderator, I’d be lying if I said this didn’t feel really good:
To be clear, that’s not my community note. They are only displayed once other moderators approve it, and when you start out as a moderator, you can only vote on other notes, not add new ones.
So far none of the notes on this tweet are appearing, but I do note some have appeared on the “Inflation is over” tweet.
All of this, from the IMF video, to the Bank of Canada Report, to those brain dead BBC “think pieces”, are quite frankly, insulting.
None of the people putting out these white papers, writing these media puff pieces or bringing home Nobel prizes, are stupid people. That means they know they are gaslighting the public en masse, when they expect them to believe that inflation is some mysterious force that comes out of nowhere and causes prices to go up over time.
Whether it’s Jagmeet Singh here in Canada blaming it all on grocery store CEOs (with those predatory 3% margins), or self-important windbags like Paul Krugman telling you with a straight face not to factor in everything it costs to stay alive when you calculate the CPI.
The level of institutional condescension that has gone into promulgating narratives like this is beyond comprehension. They really must think we’re all very stupid, infantile people.
But know what people really think about this, all you have to do is look at the price of gold, which looks to be setting up for a breakout to fresh all time highs (and Bitcoin, for that matter, up over 105% YTD) – as more and more people are taking action to preserve their purchasing power.
(H/t to David A. Stockman for coining the expression “it came in on a comet from deep space”. In his book The Great Deformation (still a great read), he used that phrase when referring to the central bankers and financiers who blew themselves up in the Global Financial Crisis and then behaved like they were utterly mystified at what caused the meltdown).
Sign up to the DollarCollapse mailing list and receive the simplest, most actionable guide to contrarian investing Nobody Knows Anything, free.
Follow us on Twitter here, or like us on Facebook here.
