We don’t need real economic activity right? Just print more fiat and all will be well!
Can a country succeed by substituting the expansion of the money supply for real economic activity?
Common sense would say ‘no.’
But the politicians seem to be saying ‘yes.’
Canada is going through yet another round of restrictions on personal freedom, which also means more restrictions on economic activity.
Businesses that have been repeatedly screwed over by the government are being screwed over once again.
In the past, there were cases where businesses had invested heavily in government ‘encouraged’ measures to ‘mitigate’ covid, with governments telling them that doing so would enable them to stay open. Then, governments often imposed further restrictions anyway, leaving those businesses in a terrible position.
Governments claim they are ‘helping’ businesses deal with this by making taxpayer money available, but you can’t sustain an economy like that in the long-term.
After all, if businesses are repeatedly ordered to shut down or have restricted capacity, the overall level of economic activity will be dramatically reduced. Throwing money at businesses not only fails to fully compensate them, but represents an ‘economy’ that is increasingly based upon nothing but the Bank of Canada creating fiat money out of thin air, and the government then distributing that money.
What is the inevitable result of that?
If companies are shut down or restricted over and over and over again, there will be fewer goods in the economy. Then, when governments print an immense amount of money in a short time, you have more money chasing fewer goods.
That makes each unit of money less valuable, which – since we judge the value of our currency by what it can purchase – makes it seem that prices are going up.
A fake economy
The more the government throws around a bunch of fiat money to cover up for the decline in actual economic activity, the more our economy becomes fake.
By fake, I refer to how expanding the money supply generates the appearance of ‘growth’ and wealth creation, while detracting from both.
Stats Canada says incomes are up 2.8% year-over-year.
Yet, inflation is 4.7% according to the Bank of Canada, and likely much higher, meaning that in real terms people are getting poorer.
He spends more.
Your paycheck buys less.
— pierrepoilievre (@PierrePoilievre) December 18, 2021
This is what happens when real economic growth – productivity growth – fails to take place, and governments attempt to cover it up by printing money.
It can demonstrate the short-term ‘appearance’ of growth, but in reality it represents the citizens of a nation being robbed of their purchasing power.
A devastating combination
In ‘normal’ times, massive amounts of money printing are bad enough. But when they accompany government imposed restrictions on economic activity, the impact is devastating.
The issue is that by printing so much money, governments are attempting to hide the true impact of repeated shutdowns and restrictions, but they only make it worse.
A problem generated by government action – imposing restrictions & shutdowns – cannot be fixed with more government intervention.
In fact, governments who try to ‘fix’ problems have become the big problem here.
Governments have far too much authority, and they are abusing that authority to restrict economic activity, restrict our rights & freedoms, and cause immense damage.
Due to advances in technology, there has never been less of a need for government. Whether it’s coordinating economic activity, or sharing information, decentralized networks are far more capable than centralized states.
Yet, the less we need government, the more government attempts to impose itself in our lives.
And, since fear causes many people to seek submission to authority, governments are continually attempting to keep everyone in a constant feeling of ‘crisis’ in order to perpetuate their power and control.
As noted in a Bitcoin Magazine article, governments are trying to blame others for the results of their own policies:
“We’ve been keeping track of Weimar signs in this rag since April of last year when it became evident that we were headed into an extended lockdown that included artificially restricted economic activity and money printing. Yesterday’s rag was an example of a Weimar sign because it highlights the fact that the administration currently in charge of the federal government is beginning to point fingers at industry for causing rising prices instead of showing a bit of introspection, assessing the massive overreach the government and central banks have embarked on over the last two years (and five decades really), and raising their hand to admit they might be at fault to at least some degree.”
And, just as we see here in Canada, expectations of higher inflation – which can lead to higher inflation – are mounting:
This is from a well known bike shop in Brooklyn, NY. It’s exactly how inflation morphs into hyperinflation.
I’ve seen similar messages from shops in different sectors and I’m having nightmares of reliving the economic disaster of Brazilian hyperinflation of the 80s. pic.twitter.com/Su47Q6hlPp
— Alpha Zeta (@alphaazeta) December 16, 2021
This will continue to persist as long as governments retain their immense level of power.
They have power over whether we can gather with people, how many we can gather with, where we gather, whether we can open our businesses, how many people we can allow into our businesses, whether we can travel, and on top of all of that the government can debase our currency and rob us of our earning power at will:
“Money printing (QE, debasement) is the only reason why governments can mandate drugs, close businesses, fire doctors and nurses, spinn main stream media, enforce lockdowns, destroy our liberties and society. That is why I tweet about current geopolitical events. #bitcoin”
Money printing (QE, debasement) is the only reason why governments can mandate drugs, close businesses, fire doctors and nurses, spinn main stream media, enforce lockdowns, destroy our liberties and society. That is why I tweet about current geopolitical events. #bitcoin pic.twitter.com/z1orcGAJu9
— PlanB (@100trillionUSD) December 19, 2021
This is a level of dictatorial power that is incompatible with any kind of ‘free society.’
For far too long we have believed we were free because we got to vote every three or four years or so, without realizing that politicians across the political spectrum have been grabbing more and more power from us.
Now, with the never-ending covid ‘crisis’ and the ‘climate crisis,’ politicians are seeking to entrench their massive power. The principles of individual rights and personal freedom are under attack from those who are supposed to be defending them.
This is why we can’t separate the repeated damage of our economy and the denial of our rights. They are both linked. A population robbed of earning power and robbed of freedom is a population that is easy to control, and that’s exactly what the corrupt political class wants.