It is an economic rule which free-market philosophers like Adam Smith have tried to explain to governments and monopolists for centuries:
Less liberty and more centralization equals less production and less overall wealth.
Governments and central banks have sought to circumvent this rule by printing money from thin air, thinking that they can create wealth while at the same time suffocating public financial interactions and trade with authoritarianism. This, of course, only leads to inflation or stagflation, and thus wealth is never actually created, it is projected like a hologram in order to trick the masses into thinking that all is well – until everything breaks, that is.
Inflationary policies inevitably lead to speculation
To be sure, capital is concentrated under this system into the hands of a select few, but the currency itself is devalued swiftly and buying power is truncated. Speculative assets and many commodities start to see a burst of activity as the inflation grows out of control.
Some of these assets will implode eventually, especially those that offer no intrinsic value or utility, that were only ever purchased in the hopes of passing them on to a greater fool. Others will explode even higher. Essentially, bizarre bubbles in various sectors are in reality a warning of the inflationary crisis to come.
There are mainstream economists out there arguing that monetary policy decisions and authoritarian mandates have no real world consequences. The inflation is “transitory”, they claim. The public will “adapt” to the new normal and submit to the controls for their own good. Central bank stimulus will defuse all crisis events in the meantime and helicopter money will placate the citizenry. Throw the public a few scraps from the table and they will shut up and happily nibble.
These academic policy-makers and unelected bureaucrats refuse to see these speculative bubbles as what they actually are: Desperate moves to avoid inflation. No one wants to hold dollars when they can watch their purchasing power being destroyed daily, so they seek something, anything else. Eventually, most of these illusory safe-havens will collapse into worthlessness (how much will your Bored Ape Yacht Club NFT be worth next year?)
As I have been saying for many years now, an economic crash in the U.S. simply cannot be avoided, and it can only be hidden from public view for a limited time. And that limit is expiring fast.
Well, guess what? The crash is here now right in front of us and it is becoming obvious even to people who barely pay attention.Continue reading“Here’s Why U.S. Supply Chain Problems Will Only Get Worse, by Brandon Smith”
