The Truth About How Governments Will Use Inflation To Redistribute Wealth

Via International Man

by Nick Giambruno

Inflation is the single biggest threat to your financial well-being.

That’s not exactly a revelation for most people. However, propaganda muddles the issue, so there is a lot of confusion.

Though he was wrong on just about everything, John Maynard Keynes was on target when he said:

“Lenin was certainly right, there is no subtler, no surer means of overturning the basis of existing society than to debauch the currency. This process engages all the hidden forces of economic law on the side of destruction, and does it in a manner not one man in a million is able to diagnose.”

What is inflation? How is it measured? What is coming next, and what can the average person do about it?

I’ll break it all down and give clarity to these fundamental and crucial questions.

Inflation is one of the most misused words in the English language. The original and correct meaning of inflation is an increase in the money supply.

Over the years, the government and their court economists in academia and media have attempted to redefine inflation to mean an increase in prices.

Since its founding in 1828, Webster’s Dictionary had always defined inflation as an increase in the money supply. Then in 2003, it changed the definition to mean a rise in the general price level.

The difference might seem subtle, but it’s not. It’s a deliberate deception.

Redefining inflation confuses cause and effect, and that is exactly the point. Price increases do not cause inflation. Instead, an increase in the money supply—inflation—causes prices to increase.

Defining inflation as a rise in prices gives people the impression that inflation is a natural market phenomenon when it is not. It also conceals who is causing this unnatural occurrence to happen. The direct victims of this swindle are, therefore, confused about what is happening.

It would be like redefining robbery to mean “a mysterious property loss,” as if there was no robber.

The reality is that inflation is 100% a political phenomenon.

Neither the local grocery store, the pharmacy, the restaurant owner, nor foreign scapegoats are responsible for inflation. The government—with its monopoly control over the currency—is.

That’s why there’s never been a gold hyperinflation.

Governments inflate the currency to generate more money than they otherwise could through direct taxation and issuing debt. Inflation is an indirect, hidden, and insidious tax that the government takes from the populous without its consent.

Doug Casey puts it best: “If taxation is the expropriation of wealth by force, then inflation is its expropriation by fraud.”

Inflation is also nothing new. Even in ancient times, governments would resort to debasing their money by clipping their gold and silver coins to raise revenue surreptitiously. Modern central banks are performing the same scam but on a scale orders of magnitude larger.

Here’s the ugly truth. Central banks only exist to steal money from you through inflation and redirect it to the politically connected.

Money represents life. So they are, in fact stealing your life via the printing presses.

Any sober assessment of the situation reveals that it’s a swindle of historic proportions.

Measuring Inflation

There are two main ways to measure inflation:

1. based on the government’s definition of inflation (increase in the general price level)
2. based on the correct definition of inflation (increase in the money supply)

One is faulty, prone to political manipulation, consistently understates reality, and is meaningless. The other more or less gives an accurate picture.

When you hear about inflation in the mainstream media, academia, or from some government official, they are talking about the Consumer Price Index (CPI) or some variation of it.

The CPI measures changes in the price level of a weighted average basket of consumer goods and services.

There are several fatal flaws with the CPI.

First, it assumes the government’s definition of inflation can be distilled down to a single number.

But prices don’t rise in uniform. For example, the costs of big-ticket items—like medical care, college tuition, and housing—tend to increase much faster than other things, as shown in the chart below.

It should be clear from the chart above that price increases aren’t distributed equally and can’t be distilled into a single number. Instead, price increases are a vector distributed unequally. Scarce and desirable assets and services are more prone to increasing prices.

Further, every individual has their own preferences, which means nobody will have the same basket of goods and services they desire. Someone living in Miami will have a completely different basket than someone living in rural Minnesota.

That’s why trying to measure a general rise in prices as a single number for 334 million individuals across the whole country—as the CPI attempts to do—is an impossible task. It’s even more absurd than taking the national average weather temperature as some meaningful data point on what clothes you should wear for the day.

But it gets worse with the CPI’s other fatal flaw.

Who gets to decide what items are included in the CPI and their weightings in the index? The government, of course!

Is it any surprise that they cherry-pick the items and their weightings in the CPI to show there is little to no inflation? In effect, the government gets to measure its own inflation. It’s like letting students grade their own papers.

Are rising beef prices causing the CPI to rise too quickly? Well, we can substitute soy burgers—or some other cheap industrial sludge—for beef in the index.

Or we can increase the weighting of things like Netflix and cell phones, which are decreasing in price, and reduce the weight of housing, which is rising, to show a lower overall CPI number.

Are gas and energy prices going up to quickly? Simple. We’ll remove them from the index.

These are the shenanigans that go on as the government manipulates the data to get the outcome politicians want.

But why would the government want to understate inflation?

Because recognizing the actual effects of inflation would help limit how much wealth they can extract from the populace through modern coin clipping. That would force some difficult budget decisions that would be politically unpopular.

The CPI is an utterly worthless statistic. In actuality, it’s nothing more than dressed-up government propaganda to conceal the fact that they are stealing massive amounts of wealth from the populace without their consent through the hidden inflation tax.

Yet, most people incorrectly equate inflation to the CPI. It’s a trope that authority figures repeat regularly, and most people accept it as truth without a second thought.

The Honest Way To Measure Inflation

The real way to calculate inflation is intuitive and straightforward.

It doesn’t require you to understand convoluted math formulas and complicated theories—as the gatekeepers in academia, media, and government mislead many folks into believing.

Simply looking at the change in the money supply gives you a much more accurate measure than the CPI. It strips out a lot of the noise, political manipulation, and propaganda to provide a straightforward number to describe what is happening.

And when you look at the change in the US money supply, it’s no surprise that the government would rather have you look at the CPI. That’s because the amount of money printing and currency debasement they are engaging in is shocking.

From the start of the Covid hysteria in March 2020 until today, the Federal Reserve has printed more money than it has for the entire existence of the US. It’s the biggest monetary explosion that has ever occurred in the US.

During that period, the US money supply increased by a whopping 41%.

In other words, if your after-tax wealth did not grow more than the 41% hurdle rate since March 2020, then you are losing ground. You’re on the road to serfdom.

As bad as the situation with inflation is right now, it’s nothing compared to what is ahead of us.

The coming money printing could be unlike anything we’ve ever seen before.

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