More Deflation Propaganda

Here’s a link to a video I received in an email from TheStreet.com.

This is a perfect example of how misinformation spreads throughout the public.  People will take what is said in videos like these and accept it as the truth because “TheStreet.com (or other media outlet) said so.”

Basically, all it says is “deflation is bad because it occured during the Great Depression.”

Notice though, that deflation is reported in falling consumer prices, or the CPI.  This number includes the costs of food and energy, which are falling right now.  Normally, when the Government reports inflation, they use core inflation, which excludes food and energy prices.

This is very convenient, isn’t it?  They pick and choose what numbers they want to report.  The government always tries to show inflation as low as possible, and now is showing big, bad deflation as high as they can.

Why does the government do this?  Because they need inflation to operate.  Inflation broken down to the simplest term is “adding to the overall supply of money.”  Rather than taxing the population, they just print the money they need instead.  This is why inflation is sometimes referred to as the “hidden tax.”

As you add more money to the overall supply, each dollar is worth less, which means our dollars buy less goods.  They need to report inflation as low as possible so we don’t realize how much the purchasing power of our dollar is declining.  Also, many foreign governments hold billions of dollars in reserve.  The last thing they want to hear is that their holdings are declining in value.

The only entity that does not benefit from the deflation we are experiencing is the government.  That is why we are conditioned to think it is bad.  Under normal circumstances, they need inflation to fund their programs.  Currently, we are in a special situation, where the government is just printing trillions of dollars right and left.  We might have short term deflation due to the decline in food and energy prices, but we are going to have massive inflation because of the massive amounts of new dollars entering our system.

The lesson of this video is that we always can’t take things for face value.  We need to learn about our financial system and what the numbers and stats the government and financial institutions use mean.  If we really understood, we would see through the lies and propaganda, and see how the actions of our government are going to destroy our standard of living.  As Henry Ford said,

“It is well enough that the people of this nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution tomorrow morning.”

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