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Main Stream Media Inflation vs Deflation Propaganda

Saturday, January 25, 2014 21:03

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(Before It's News)

TND Guest Contributor: Nathan McDonald, Sprott Money Blog |

The Main Stream media in coordination with the government has been on a crusade for decades to convince its citizens that inflation is your friend. They sell this by painting a gruesome picture of collapsing economies and by making reference to the Great Depression. Striking fear into the hearts of the financial uneducated everywhere.

The question is, are they telling the truth? Do we need to fear deflation? Of course not. It is exactly the opposite of what the government states. We need to fear inflation.

The reasoning behind the government’s romance story with inflation is simple. Inflation helps decrease the burden of government debt. The US stands at the moment a whooping $17,340,313,120,000 in debt! This number is truly staggering. The worst part is, that this doesn’t even include unfunded liabilities! If you were to include those numbers, you are looking at a horrifying number, over $127 Trillion.

Therefore, you can quickly understand why the inflation campaign of propaganda is of huge importance to the US government and other Western governments around the world. Via stealth inflation (IE printing copious sums of money), they can lessen this burden by destroying the value of that debt. Of course, to create money, they must create debt. So it is a never ending cycle of abuse. Sadly Keynesian economists have a hard time understanding this. Even more sadly, the school of Keynesian economics currently runs the financial world.

Now let’s move onto why deflation, the enemy and “plague” of citizens around the world, is in fact a good thing for the everyday citizen. Let’s use the example of the everyday citizen going to the grocery store. You pick up your usual items, fill your basket and checkout at the cash register. To your SHOCK your bill is 25% cheaper than normal! Of course, you are happy and carry on with your day, content with the fact that you can spend your saved money on other products and services that you require or enjoy.

No, no says the government, this where you should be scared. According to them, consumers would take note of this and simply stop spending! Yes, that’s right. According to the government, all citizens would simply put off their spending habits in anticipation of further falling prices, creating a crash in the economy due to a lack of spending and hoarding of funds.

This is a preposterous and an idiotic presumption. People will of course will not stop eating if food prices go down, people will not stop driving their cars if gas prices go down and people won’t even stop buying luxuries if prices go down! Let’s use the electronics industry, one of the few sectors that inflation has not been able to inflict with its disease. For decades the price of electronics has continued to fall at a rapid pace. Has this deterred people from needing a new computer or television? Of course not.

The government’s argument of why inflation is good for people is paper thin. It is simply a cloak to hide their true reasons for wanting an ever rising rate of inflation. They don’t want to face reality. They don’t want to take accountability and pay the piper. They like buying votes with campaign promises they can’t afford, but can borrow to finance at the cost of future generations.

So the next time you hear a government official or one of the bobble heads on financial television tell you that inflation is good and deflation is bad, ask yourself the following question: for who?

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Nathan McDonald writes for Sprott Money Blog, part of Sprott Money Ltd., a leading precious metals dealer selling gold coins, silver coins and bullion bars online and over the phone. As one of Canada’s largest owners of gold and silver bullion, the company’s goal is to facilitate ownership of precious metals no matter how big or small the portfolio.