united for freedom 

Deflation

In a world run by money there are only two ways for prices to go, up or down. If prices go up money is inflating. When prices go down money deflates in a relative sense. The terms are however highly misleading and confusing. 

When money inflates it loses value. An inflationary currency buys less than one that is deflating. The main cause of inflation used to be over-use of the printing press. Governments that controlled the printing of money often misused the power. Too much money chasing too few goods made money less valuable and so the value of the currency would inflate or lose value relative to the supply of goods and services.

Nowadays banks create most of the money supply and they do this by lending it to the economy. The State uses the printing press to print money and spend it into the economy but banks do the same job by creating debt. The currency we use is almost all debt. 

The following documentary explains how the money supply is created by banks.

 

 


To eliminate debt the nation has to eliminate digital currency or all currency created by banks, currency called commercial bank money.

If you understand how money is created in this system of things it becomes obvious that debt must always exist for the economy to have money and where there is debt there is interest payments and inflation. What may not be less obvious is that where inflation exists there is injustice and tyranny. The former because inflation takes value away from the productive sector and tyranny because oppression has to exist to maintain the status quo.

We cannot look at deflation as just a decline in prices because this cannot happen over the long term without a total restructuring of the economy.

Deflation in this system of things is very destructive because it is not compatible with the administrative protocols of Capitalism.

Tyrants cannot compete and oppress others easily when prices are falling because debt is vanishing and money becomes more valuable. Inflation eats away value from peoples possessions not so much because the item has lost value in dollar terms but because maintaining ones standard of living becomes harder and harder the more money declines in value.

Deflation consists in the elimination of debt and in this system of things the dissapearence of money. Inflation consists of an increase in the money supply and an increase in debt but a decline of value. Neither of these options are sustainable or rational.

 

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