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Quantitative Easing (QE) = Stealth Inflation = Stealth Tax

March 10, 2013

By John K Rooney

Inflation’s ugly head is again exposing itself, although not at Wiemar Republic levels. For the everyday man on the street, the rising costs of basic goods and services is having a crippling effect.  As the dollar weakens, along with the world’s other currencies in a race to the bottom, we need more dollars to purchase core necessities such as food and energy.  The current round of money printing known as quantitative easing is weakening the buying power of our incomes through a stealth tax known as inflation.

It’s an old trick, with a high tech flair.  How does the government, without risking a revolt,  raise more taxes to satisfy it’s voracious appetite for deficit spending? Print more money. Like an addict needing a fix, the controlled economy gets another infusion of the liquid deity.  It’s just what the Keynesian, socialist witch doctor ordered. Unfortunately, the primary side effect is inflation.

Using a complicated, mix of hedonics and product substitution, the BLS bean counters have been able to show on paper relatively benign inflation figures.  They explain that new cars have many more bells and whistles compared to those of 30 years ago, therefore, the 300% price increase is low.  Despite the moderate CPI rate, inflation is very much alive and well. This is confirmed by which uses the old formula to measure prices.  We are reassured by state propagandists that rising costs are isolated in food and energy, but these comprise a large part of most families’ expenditures besides housing.  The rising stock market is another example of inflation because it takes more money to purchase ownership in corporations.  It is easy to borrow dollars to buy stocks.  In addition, what the privately owned Federal Reserve Bank is hoping to achieve through it’s historic manipulation of interest rates is housing inflation which could initiate another speculative bubble.  Speaking of bubble, there is possibly no greater area of speculative inflation than the bond market.  The bond market is in the stratosphere and it has been artificially expanded by central bankers’ monetary policy and a Congress that is on the take.  I don’t envision a happy ending to the bond bubble unless the US experiences a perpetual, Japanese style downturn.

Regarding inflation, you may have been told that food is just one of the items showing rising prices.  Have you seen the price of apples? It is way up!  How about beefsteak?  Much higher! Do you enjoy bread? What about nuts, soups, cereal, pork, chicken, coffee, bathroom tissue, eggs, fruits, snack-foods? And, it goes on and on.  There are many, many consumer prices going up in the food area as there are in the energy sector. Gasoline, diesel and oil prices impact transportation  costs as well as production costs for plastics, chemicals and precious metals.

We are taught that a small amount of inflation is necessary to maintain a healthy economy, but in an authentic free market, with Constitutional money based on precious metals, this is not so. Before the creation of the secretly spawned Federal Reserve cartel, there was no long lasting, systemic inflation problem.  The hard truth is that inflation is the confiscation of wealth from the lower and middle classes, and this wealth is transferred to the government and international banking concerns.

Rising prices are, however, being offset by lower priced goods manufactured in places like China. By design, much of our industrial base has been transferred to a hostile, totalitarian dictatorship in what may be viewed as an economic, shotgun marriage.  So, what is the solution to a century of inflationary theft?  Should we keep voting for the same spineless Republican’t and Demoncrat sellouts to the banker/Zionists-controlled establishment?  In doing so, we’ll continue to get what we probably deserve.

In reality, it would take voting for statesmen with a spine who are committed to ending the Federal Reserve and returning the US back to sound money.

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