Zero Hedge, authored by Daniel Lacalle:
There are many excuses often used to explain inflation. However, the fact is that there is no such thing as “cost push inflation” or “commodity inflation.” Inflation is not an increase in prices, it is the destruction of the purchasing power of the currency.
Cost-push inflation is more units of currency going to relatively scarce real assets. The same can be said about all other, from commodities to demand and my favourite, “supply chain disruption”. More units of currency going to the same goods and services.
The monster inflation we have endured these years first arrived through asset inflation and then through consumer prices. Now, governments and statistical bodies are tweaking the calculation of CPI to disguise the loss of purchasing power of the currency and central banks had to hike rates after the disaster created in 2020, when the massive increase in money supply went to finance bloated government spending and created the mess we live today.
Central banks know that inflation is a monetary phenomenon and that is why they are hiking rates and tightening as fast as governments allow them. However, central banks have lost a significant amount of an already low credibility by first ignoring the inflation risk and later using the base effect and transitory excuse, only to react late and slowly.
This has happened in a world where the excess in money supply growth has a number of back-stops and limits that prevent a massive increase in consumer prices through the destruction of the artificially printed currency. With quantitative easing there are a number of limits that stop inflationary pressures: As the transmission mechanism of monetary policy is the banking channel, it is our demand for credit what puts a break on inflationary pressures.
The only thing that saves citizens from much higher prices is the fact that the transmission mechanism of monetary policy is independent and diversified. Now imagine for a second if that transmission mechanism was direct and had only one channel, the central bank itself.
A central bank digital currency would be issued directly to your account within the central bank. As such, it is surveillance disguised as money. The central bank would know exactly what you use the currency for, how much you save, borrow, and spend and where. It can make the currency fungible to avoid the ludicrous but often repeated “problem” of “excess savings”. Furthermore, with increasingly political central banks, they may even penalize those who spend in a way that they deem inappropriate of benefit those that do what they recommend.
The entire privacy system and monetary limit mechanism would be eliminated. Even worse, when the central bank makes the mistake of printing way too much money as they did in 2020, the impact on consumer prices would be direct. With an increase in money supply that exceeded 20% in a year, we would be suffering close to 20% levels of inflation as the limits to the transmission mechanism are destroyed.
Now imagine if there was only one account, one central bank and the government. Guess what would happen? The complete monetary financing of all government spending driving the currency to hyperinflation in a few years and the obliteration of the private sector. A de facto nationalization. A digital version of the French Assignats. Hyperinflation and full government control and financial repression.
Central bank digital currencies are an unnecessary and terrible idea. Read More …
Opinion: Terrible idea but useful to fulfill Bible prophecy.
“He causes all, both small and great, rich and poor, free and slave, to receive a mark on their right hand or on their foreheads, and that no one may buy or sell except one who has [a]the mark or the name of the beast, or the number of his name.” Revelation 13:16-17
Imagine the complexity of distilling all 197 currencies and tons of gold and silver coins down to a ‘mark’, without first having created a new paperless, non precious metal backed currency.
“They will throw their silver into the streets, And their gold will be like refuse;
Their silver and their gold will not be able to deliver them In the day of the wrath of the Lord” Ezekiel 7:19
But there is more. Before the mark of the beast, another prophecy that foretells hyperinflation comes first:
“When He opened the third seal, I heard the third living creature say, “Come and see.” So I looked, and behold, a black horse, and he who sat on it had a pair of scales[a] in his hand. And I heard a voice in the midst of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not harm the oil and the wine.” Revelation 6:5-6
And that Black Horse is what the whole world, with the exception of the 1% (oil and wine), is very concerned about today.
To see how it all plays out, read “The 1% and Revelation: Do not Harm the Oil and Wine” HERE