Inflation is cumulative, a fact conveniently ignored, because the implications would make the public even more angry.
Through a combination of extreme divisiveness from the Trudeau government, the ceaseless assault on our rights and freedoms, and an economy that is getting worse and worse, Canadians are more angry than ever.
And that anger is 100% justified.
In the face of that anger, the government is becoming more and more aggressive and manipulative.
With that in mind, there’s one aspect of the manipulation that has been place for quite a while:
The way governments talk about inflation.
For example, the US government claimed there was “no inflation” last month, since the inflation rate fell from 9.1% to 8.5%.
What governments fail to mention or explain is that doesn’t mean inflation went ‘down.’
Prices in the US are still up 8.5% year-over-year.
A ‘smaller’ increase in inflation is still an increase, not a decrease.
Whenever inflation slows even a bit in Canada, we can expect the Liberals to make the same “no inflation” claims.
But there’s something else that is rarely discussed, even though it is perhaps the most important aspect of inflation.
Inflation is cumulative
When inflation surges for a sustained period of time, and then eventually returns to normal, prices are still much higher than they would have otherwise been.
If inflation is 10% one year, and then 5% another year, that 5% increase in prices is based on prices that were already 10% higher.
Yet, this is often framed as “prices going back to normal,” when it is really no such thing.
And in the case of Canada, where wages are growing at a much slower rate than inflation, people still end up much worse off than they would have been with lower inflation.
Further, when inflation starts to “recede,” pressure on wages also recedes, meaning that many people in the country will be unable to catch up to the “new normal” of elevated prices.
Governments avoid mentioning this on purpose, instead preferring to pretend that inflation never really happened at all. They do this because it allows them to evade blame for policies that have impoverished many Canadians and made most of the country worse off financially.
People often instead blame ‘greedy corporations’ or ‘the rich’ for inflation, even though inflation is caused by government overspending, government-imposed economic restrictions, the carbon tax, and central bank money printing.
For example, Jagmeet Singh regularly displays pathetic ignorance about inflation, completely ignoring the role of government in causing it and instead blaming corporations, while demanding the government give everybody $1000 to “help,” even though that will simply drive up inflation even more.
Those ignorant tactics work on many people, because the government has long sought to keep people in the dark about how inflation is caused and how it really works.
So, it’s up to people like us to help share the truth and ensure Canadians know the mechanics of inflation and know to hold the government responsible for the damage being done to our economy and our country.
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