Posted by D
`So, why don’t you fix it dear Henry, dear Henry…Henry dear?’
`Sorry , Dora, can hardly answer you, it’s a bloody great hole and it will eat up all that we have to mend it.’
Scream from left of Henry , then a thud as Dora, fainting, hits the floor.
The three interlocked reasons for inflation are: govt. consumption, central `banks’ forcing down interests rates, printing fiat money.They go together becuase the last two serve the former.
There is a fourth, prices escalate as govts: consume more and moreover, increase payroll, that is, take on ever increasing people and handing unearned income to them. This has to be paid for and that is what one has been observing for the best part of two years.
Nor is it simple price increases: it can be, as it is increasingly transparent in Victoria, decline in quality of products, range of goods, as well as reducing quantities of goods.You get less for your money and what you can obtain,of increasingly inferior quality.Part of this is what consumption by govts does,it sacks capital, thus savings( not the mythic types of savings Latham is banging on about - already well catered per compulsory superannuation’).
An excellent case is USSR: for that 4th type of inflation ran rampant in the USSR , the magnitude of which only emerged into the light of day when, on the end of the USSR, the shift to market guided actions, the monetary rate of inflation hit 1,000 % .
1,000 %,is a staggering rate, incomprehensible, except for those who lived during the German stagflation, a vicious deliberate policy on the part of that govt. to induce a crsis ( it actually, paradoxically-failed - but for reasons peculiar to the post-WWI German economy which constrcicted the capacity of the govt. to induce ecomonic turmoil).It nonethless illuminates the above point. which corrects a mistake in the Herlad’s Sun article on:
`$1,000 hole in family budget’
The mistake is contained in the statement price increases outstripping (official) inflation rate and increases in paypackets of averaged 3.7% (this year presumably?)
The 3.7% wage increases is of course not merely skewed but is all on the side of the Victorian Govts. payroll accounts, reflected in the report one has cited previously.
What the Herald Sun has failed to grasp, in sum, the `prices rices’ is inflation kicking off.It is explained by the sheer expoenetially sttep increases in govt. consumption and the payroll - flooding Victoria with unearned incomes - in fact it is not income, by definition, which the govt. is paying its army of swindling mendicants, it is just paper, fiat money, backed by no production, worth zippo.
Not only all the new `employees ‘ of the govt. but also the police, nurses, teachers, bureaucrats,each one of you, your ` pay’ increases exists only on worthless paper, notional only.
The further irony, when the governor of the reserve bank bangs on about the need to tackle inflation, by credit expansion, he is not hitting the culprits, local, states and federal govts. He is hitting the real economy corrupted by the likes of the swindlers and their great political voting block of mendicants.
Worts of all, the whole lot of them are dragging all else who are otherwise expected to cash in savings to pay for this downright massive scale theft .Bye the bye, don’t expect employment rates to continue up next year, one predicts next year, probably first quarter the fugures will show a developing steep and fast downward slide. The Spring St. spivs’ show is a corrupt govt. , and it is well set on a course whiich will inflict nothing but misery on many once again.
And don’t expect any objections from the churches who reckon christiainity is really coda for coommunist paradise and which, of course, are major beneficiaries of govts malfeascent ways.
In other words, prices increases in Victoria are not outstripping inflation because what the Herald Sun hasn’t grasped, it is infaltion, real inflation which is occurring. But don’t expect neither the rags, Bolshevik ABC, SMH, Reserve Bank nor even the Federal Treasurer to pick up on this - not least because the last two are into it up to their eyeballs.Yes Brumby, once again you sociasts are sinking Victorians back into poverty St.
(Continued)