First, the authors acknowledge that the federal government uses inflation as a tool to handle its debt. In other words, it acknowledges that we’re all paying an inflation tax.
Second, the paper concedes that merely tinkering with interest rates won’t slay inflation if the government continues to spend far beyond its means.
It appears somebody at the Federal Reserve has figured out that the central bank can’t tame inflation, so it’s setting up a scapegoat – Uncle Sam…
A paper co-authored by Leonardo Melosi of the Federal Reserve Bank of Chicago and John Hopkins University economist Francesco Bianchi and published by the Kansas City Federal Reserve argues that central bank monetary policy alone can’t control inflation.
The paper’s abstract asserts, “This increase in inflation could not have been averted by simply tightening monetary policy.”
In a nutshell, Melosi and Bianchi argue that the Fed can’t control inflation alone.
US government fiscal policy contributes to inflationary pressure and makes it impossible for the Fed to do its job.
Trend inflation is fully controlled by the monetary authority only when public debt can be successfully stabilized by credible future fiscal plans. When the fiscal authority is not perceived as fully responsible for covering the existing fiscal imbalances, the private sector expects that inflation will rise to ensure sustainability of national debt. As a result, a large fiscal imbalance combined with a weakening fiscal credibility may lead trend inflation to drift away from the long-run target chosen by the monetary authority.”
There are a couple of startling admissions in this single paragraph.
First, the authors acknowledge that the federal government uses inflation as a tool to handle its debt. In other words, it acknowledges that we’re all paying an inflation tax.
Inflation is a tax. It’s the way government finances deficit spending. Government spends money. It doesn’t collect enough taxes, so it has to run deficits. The Federal Reserve monetizes those defiticts – prints money. They call it quantitative easing, but that’s inflation. Government is getting bigger and bigger, and families across America are going to have to bear that burden through higher prices.”
Second, the paper concedes that merely tinkering with interest rates won’t slay inflation if the government continues to spend far beyond its means.
As the provost and I discussed the prospects of this new program, he smiled and said, “We hope this lottery passes. Then we can raise tuition by $3,000.”
When I interviewed for a teaching job at private college in Alabama more than twenty years ago, the recently elected governor had won partly on a platform in which the state would install a lottery system that would give students a $3,000 grant for college. As the provost and I discussed the prospects of this new program, he smiled and said, “We hope this lottery passes. Then we can raise tuition by $3,000.”
(The Alabama legislature, despite being controlled at the time by members of the governor’s party, failed to pass and implement the lottery.)
In the aftermath of President Joe Biden’s announcement that the government will forgive up to $20,000 of student loan debt for qualifying borrowers, the responses are following the political ideology of the commentators. For example, columnist Tressie McMillan Cottom of the New York Times declared it a “win,” although she then demanded even more loan forgiveness.
College Loans Have Helped Drive Up Higher Education Costs
While government officials are implying this is a one-time thing, we know that the political system will not put this to rest. After all, the forgiveness is being applied to student loans taken out in the past, yet college students continue to take out new loans for the coming academic year—and beyond. In fact, Biden’s loan forgiveness is going to have the same effect that my interviewer hoped would be the case if Alabama implemented a state lottery: higher prices for a college education.
That higher education costs have skyrocketed is a given. As Forbes explains:
What matters to the wokes is virtue-signaling while they have no empathy or compassion for anyone—their materialistic, animalistic desires drive them. Lacking any moral fabric, they have no inhibitions about dipping their hands in others’ pockets. They feel no shame in asking for the unearned. Lacking self-responsibility, they always have someone to blame for their real or imagined suffering. Unable to think critically or think at all, they don’t want their valueless, hedonistic, animalistic ways to be challenged.
There are a whole range of gradations between what were the progressives of the past and this emergent popular culture, wokeism, represented by the Canadian PM, Justin Trudeau and his team of federal ministers, the US President, Joe Biden, the Vice President, Kamla Harris, the Supreme Court Justice who cannot define “woman.” None of these people would have come to power had we not upended meritocracy by choosing our leaders through democracy, handing over institutional control in the West to the lowest common denominator, the bread-and-circuses masses, the bottom 51% of the voters.
Some people consider Christianity or Islam to be the fastest-growing religion. As statistics are presented, that is indeed the case, but unaware of the nuances, one can be misled.
A rapidly rising insidious religion is wreaking havoc in the West and the Third World. It has hallowed out Christianity. It is quickly finding converts in the Muslim world, in a silent apostasy that even the fundamentalists cannot challenge. It is finding converts worldwide, even when people speciously continue to adhere to their formal religions.
It looks cute, non-violent, mostly innocuous, secular, and even kind-hearted.
It is proliferating, not because of any conspiracy or proselytization but because its growth is a natural outcome of falling away from civilizational restraints and ethical conduct. It is a result of entropy. It has come to be known as “wokeism,” a belief system of no beliefs, a value system of no values, where there is no objective morality. If you engage in female genital mutilation as an immigrant, there is no problem among the “wokes.” You have the right to preserve your culture.
For the wokes, everything is subjective and relative. Emotions, not reason or morality, are the basis of logic.
They have come to control the institutions in the Western world. They don’t understand the concept of classical justice. Their ideology is deeply imbued with multiculturalism, diversity, feminism, LGBTQ, environmentalism, egalitarianism, affirmative actions, safe spaces, etc. It is not that there is a problem with any of the issues they raise, but they lack comprehension or understanding of the associated costs. More importantly, behind the façade of their activism is an attempt to transfer the responsibility for their failure in life to others and to get free resources.
What matters to the wokes is virtue-signaling while they have no empathy or compassion for anyone—their materialistic, animalistic desires drive them. Lacking any moral fabric, they have no inhibitions about dipping their hands in others’ pockets. They feel no shame in asking for the unearned. Lacking self-responsibility, they always have someone to blame for their real or imagined suffering. Unable to think critically or think at all, they don’t want their valueless, hedonistic, animalistic ways to be challenged.
Those who provide a counterpoint get a fatwa—they get canceled and removed from functioning in society. Worse is to come in the West as the cancel culture matures slowly and surely. A valueless, amoral society is not in-your-face evil but barbarous and savage in its outcome. And that outcome is inevitable in a society that has lost its civilizational moorings.
Most people think wokeism to be childish and irresponsible. Some might say that a dose of wokeism can soften fundamentalist Islam. What is wrong if something challenges the fundamentalism that Islam engenders? That is until you have not experienced wokeism. I should know better. I grew up in a woke culture—in India—which had no values, morality, or civilizational constraints and where getting away with crime was glorified.
A few days back, the Indian government, in a widely publicized event, released some men who had been in prison for rapes, brutalities, and killings, which included children and babies. On their release, sweets were distributed. Politicians of the ruling party called them “good Brahmin.” The criminals’ release before the upcoming regional elections should tell you something.
No one knows better about the psyche of the citizenry than politicians. Politicians know how to motivate voters. The release of the criminals is a well-calculated affair. It will increase the vote in favor of the ruling BJP party. These voters are not criminal or evil in the conventional sense. But, as is the culture of India, these voters have no values. They overlook the pain that the rapes and killings inflicted on their victims.
Hannah Arendt rightly invoked the concept of the banality of evil. When civilizational constraints fall away, you are left with savagery and barbarism, even when you mostly see innocent-looking people around you.
Evil hardly ever is a fierce-looking, sharp-toothed devil. It is usually alluring. It caters to our animalistic instincts.
Those who grow up in a culture that subliminally enculturates ten commandments, compassion, and empathy might assume that these values occur naturally to human beings. These values came to exist in the West over several millennia after a tremendous struggle, a civilization-building process. These values are conspicuous by their absence in the Third World and among the wokes in the West—and there is a reason why the wokes have an affinity for the Third World cultures. They are the same.
What happens when society has no values? Does it become free, where people can do whatever they intend to do with their personal lives? Unfortunately, having a civilization requires certain boundaries and fences and a moral code of conduct, where people’s animalistic desires are fenced in to at least ensure that the liberties of others are not violated. A civilization requires social opprobrium for certain acts, even for what does not seem to hurt others.
We have reason to celebrate, according to the Associated Press.
The Federal Reserve System is at its most diverse ever!
…So the problem with the Federal Reserve isn’t that it interferes with the market economy by manipulating interest rates. The problem isn’t that its interventions cause the business cycle. The problem isn’t its bailouts, or the moral hazard introduced by the very existence of a paper-money producer like the Fed (since major market actors know there is no physical constraint on money creation and therefore on the Fed’s ability to bail them out if it came to that, they behave more recklessly than they would otherwise).
No, the problem is that not enough female, black, and “openly gay” people have been participating in these awful things.
If you are paying too much attention to the hyenas, you will depress yourself. It is good to know what they are up to, but that’s it. They have no actual bearing on your life. Am I being clear? Klaus Schwab does not matter. Tony Fauci does not matter. The bravest and most discerning among us see those people and their ideas for what they are and have not fallen for them.
A third group of people actually do determine the trajectory of history. They are the lions. A lion can be asleep or awake. A lion, once awake, naturally exudes freedom in the world around himself. He does not need to be led. He does not need to be told what to do. He just needs to be roused from his sleep. Naturally, as he goes about his day, the world around him becomes more free. That is the only group of individuals who deserve anyone’s attention. Sheep and hyenas get in line when the lion in wakes up.
Stevo, I went to the grocery store. . . you look around and it is all so depressing.
These morons are still wearing masks!?
The CDC has literally said this is all nonsense and these idiots are still wearing masks.
-The Gadfly Majestic
—-
That is from one of the bravest, most heroic freedom fighters I know. If one man will be left standing, fighting the great lie on his own, that is the man who I am sure will keep standing.
Should that depress you that even he is whining about the reality of the situation? I hope not.
What it says to me is that we all need someone to turn to from time to time.
What Did I Say To My Dear & Brave Friend?
I spoke to him a truth that has been true for all human history. It is a truth that frequent readers will recognize, but which cannot be spoken too often.
A First, Hard To Ignore Group Of People
In all periods of history, you have folks looking to take advantage of others. They are a small group, can have significant panache and influence, but ultimately do not determine the trajectory of history. They are hyena-like in their approach. The Klaus Schwabs and Tony Faucis, the Bill Gates and Joe Bidens, are hyena archetypes and giving them too much attention promises to leave you discouraged and distracted.
A Second, Hard To Ignore Group Of People
In all periods of history, you have a second group of people. They also do not determine the trajectory of history. They are sheep-like and make up the overwhelming majority of society in all periods of history. If you think otherwise, you are missing that important reality. If you believe salvation is to be found in the masses, that is historically disproven. The majority will not ride to the rescue. The majority will often be filled with individuals doing the exact wrong thing, simply doing his best to follow the most leader-like person around him.
The person masked at the grocery store, your triple vaxxed sister-in-law who has had her third stroke since April, your triple masked neighbor, your boss who puts on the mask below his nose when expecting an important visit, the police officer or doctor or bureaucrat who is just doing his job. These are all sheeplike people. Giving them too much attention promises to leave you discouraged and distracted.
A Third Group Of People, The Ones You Ignore At Your Own Peril
A third group of people actually do determine the trajectory of history. They are the lions. A lion can be asleep or awake. A lion, once awake, naturally exudes freedom in the world around himself. He does not need to be led. He does not need to be told what to do. He just needs to be roused from his sleep. Naturally, as he goes about his day, the world around him becomes more free. That is the only group of individuals who deserve anyone’s attention. Sheep and hyenas get in line when the lion in wakes up.
In this psychological battle we are in the midst of, it is so important for the enemy to keep your attention on the sheep and hyenas, because keeping your attention there will distract and discourage you. The lions, however, are the only one who deserve your attention.
So, Knowing That, What Do We Do?
If you are paying too much attention to the hyenas, you will depress yourself. It is good to know what they are up to, but that’s it. They have no actual bearing on your life. Am I being clear? Klaus Schwab does not matter. Tony Fauci does not matter. The bravest and most discerning among us see those people and their ideas for what they are and have not fallen for them.
Over the past week, shocked Europeans – mostly in the UK and Ireland – have been posting viral photos of shockingly high energy bills amid the ongoing (and worsening) energy crisis.
Several of the posts were from small business owners who getting absolutely crushed right now, and won’t be able to remain operational much longer.
One such owner is Geraldine Dolan, who owns the Poppyfields cafe in Athlone, Ireland – and was charged nearly €10,000 (US$10,021) for just over two months of energy usage.
Geraldine Dolan, of Poppy Fields Cafe, Athlone, with an electricity bill for just under ten thousand euro for two months. Photograph: Dara Mac Dónaill / The Irish Times Photograph: Dara Mac Donaill / The Irish Times
As the Irish Times reports, “The cost of electricity to the Poppyfields cafe for 73 days from early June until the end of August came in at €9,024.70 an increase of 250 per cent in just 12 months. There doesn’t include the €812.22 in VAT, which brought her total bill to €9,836.92.”
“How in the name of God is this possible,” tweeted Dolan.
UK pensioners are also facing a “terrifying” winter, as elderly Britons are about to get hit with an 80% rise in energy bills in October.
Elderly Britons are set to welcome a boost of around £1,000 to their state pension payments next year thanks to the return of the triple lock, however the cost of living crisis will still leave them significantly poorer.
However, the price cap for energy bills will rise by 80 per cent to £3,549 in October, and it is predicted to rise over £6,600 next year according to Cornwall Insight.
Higher energy bills often hurt pensioners significantly more than the rest of the population because they spend a greater amount of their income on heating their home. -Daily Mail
According to Caroline Abrahams, charity director of Age UK, “‘It’s a truly frightening prospect and one that most could not have prepared for, and never expected to face at this point in their lives,” adding “I think a lot of older people will be utterly bewildered that it has come to this and will also feel badly let down, and I can’t say I blame them.”
But that’s just the tip of the iceberg. Twitter researcher ‘Crab Man’ (@crabcrawler1), who compiles deep dives on a wide variety of topics (and is absolutely worth a follow), has put together a lengthy thread of similar cases – and put it in the context of the current European energy backdrop. The situation is dire, to say the least.
“It is not at the level we would like to go into combat,” a US defense official told The Wall Street Journalof the Pentagon’s fast depleting stockpiles due to unprecedented defense aid to Ukraine, and stressed in particular that artillery ammunition is now “uncomfortably low”.
What’s more is that the shortfall will likely last into the future, given the norm is for new purchases and then manufacturers supplying the weapons to take a process of years.
“The U.S. has during the past six months supplied Ukraine with 16 U.S. rocket launchers, known as Himars, thousands of guns, drones, missiles and other equipment. Much of that, including ammunition, has come directly from U.S. inventory, depleting stockpiles intended for unexpected threats, defense officials say,” the report spells out.
In total so far, the US has pledged to send about $13 billion in arms to Ukraine after only six months of conflict. Given the alarm over Washington’s own dwindling stockpiles, the DoD is now opting to send 105mm rounds to Ukraine instead of the 155mm guided ‘smart’ artillery shells.
In early July, a senior US defense official told reporters in a briefing that the Ukrainian army was at that point firing about 3,000 155mm shells per day:
The revelation came amid questioning on the latest tranche of weapons and ammunition being sent to Ukraine, including, for the first time 1,000 guided 155mm ‘smart’ shells.
The official said despite the high usage rate, Ukrainian forces still have “substantial stores” of 155mm rounds and are far from running out with more rounds on the way. The U.S. and NATO allies have donated hundreds of thousands of 155mm rounds to Ukraine.
But already at this point it seems the Pentagon is becoming increasingly uncomfortable with the rate of these ‘donations’.
The Wall Street Journal report indicated further that the US Army has requested of Congress another $500 million per year to enhance its own ammo factories. It remains that the biggest winner in all of this is the big defense contractors and manufacturers.
Meanwhile, other NATO allies are facing this same problem and worry, especially ‘neutral’ Germany which has dramatically shifted its historic stance on not sending weapons into foreign conflict zones. A number of German politicians have warned that Berlin should not be sharing weapons from its own arsenal, given that “Unfortunately, the situation here is such that we have an absolute deficit in our own stocks,”according to the recent words of Foreign Minister Annalena Baerbock.
Speaking to German media agency ZDF, she said: “However, Germany must also think in the medium term. Due to the German arms problem, the armaments industry had to dedicatedly produce material for the Ukraine.”
