The central bank is lying – a pro union post

As a libertarian I am supposed to be the champion for big business and the rich ‘cause that’s how lefties tell it.

One of the best ways of attacking a certain point of view is to re-write history, turn an ideology around and attach certain less attractive attribute to it and then argue against this made-up version.

Throughout history this has been the most preferred weapon of choice for collectivists and socialists.

This is how they sell the public that closing down a daycare center, paying out huge bank bonuses or that the European Union is equivalent to libertarianism. Anything evil is equal to this fictitious enemy.

But as anyone paying attention knows; the ones that have been arguing against the bail-outs, the bonuses and how the banking sector is screwing us, from the very start, are those with the libertarian persuasion. If one read novels, opinions and libertarian blogs this becomes very clear as well as the fact that libertarians aren’t the allies of huge corporations, quite the contrary.

Don’t get me wrong, I don’t like unions either, but not for the reasons lefties argue. I don’t like unions because they never think long-term, they never think of the ones actually providing jobs and they definitely don’t think of the non-working member or potential member. Over time unions have also become very hierarchal and elitist in their structure, in effect possessing the übermench approach they accuse their made-up enemies of having.

However, I dislike lying and deceit even more and I’m here to give unions an argument in the coming salary negotiations. This is something that sometimes gets lifted in the debate, but never by anyone actually understanding the underlying structures or the implications. What I’m talking about is inflation.

All of you out there need to understand inflation, understand money manipulations and how our banking sector works. As long as you don’t you’ll get ass fucked with rusty appliances over and over again, and this no matter who runs the country.

99 percent of the people have no idea about how these things work, and this includes most economists, politicians, pundits and teachers. If you really, really knew, you would be out in the streets right now stringing up elected criminals in lamp-posts. IF you really, really knew, every last one of you out there would be eyeing that grassy knoll...

So when the Swedish central bank issues a claim that there’s no room in salary-negotiations for too high increases (preferably no increases at all), you need to understand why they are saying this and why it is a lie.

You see the Consumer Price Index (CPI) that measures changes in the prices paid for a representative basket of goods and services, came out the other week and it showed an increase of 2.7% for Sweden. This general increase in prices - all else equal and with interest rates at zero - needs to correspond to your salary increase otherwise you’re getting lower purchasing power hence lower salary.

And the central bank and those in charge equals CPI with inflation – that’s a lie!

1 UNDERSTAND THIS: Prices going up is the consequence of inflation!

2 UNDERSTAND THIS: the only entities that can cause inflation are the central bank and your government.

The central bank is saying you shouldn’t ask for higher salary because of inflationary worries. In the mind of these idiots (or ‘complacent tricksters’- take your pick…) higher salaries will lead to higher prices in an endless spiral. But since the central bank is the entity that actually creates inflation via the printing machine, this is an outrageous claim and you should call them on it.

Ever wondered why our grandparents could survive on one job per family while we today hardly can manage with two? They could buy a house, a car and live a pretty good life, of course not with all the same appliances and technology we have today, but they managed and they did so not only on one single salary (mostly), they also did it with a lower degree of debt.

We are more in debt today and our total work in-put is higher, but we’re not really earning more money. Have this never entered your mind? Ever wondered why this is?
You probably never really thought about it since your equivalent salary seen in the number of kronor/pounds/dollar is higher today. Whereas your ancestor earned maybe $1000/month you today have $5000. Seems higher doesn’t it? It is not.

You need to remember that money is useless pieces of paper we use as exchange-goods.

Whether the name is “idiot-money” or “dollars” has no meaning whatsoever and so hasn’t - if all else stay the same - what it says on the note. If the note say 10, 20 or 100 is irrelevant, what is relevant, however, is what you can buy with it.

3 UNDERSTAND THIS: what is relevant with your salary or the money is what you can buy with it, not what it says on the money or how much of it you have.

Inflation VS deflation
Many economists claim that deflation is the worst thing that can happen, which is, of course, totally false. Deflation - meaning lower prices - is a very good thing and a cornerstone in a healthy economy. If we produce more, faster, and better then prices should go down, even when adjusted for pay-increases and profits to stock-holders. Deflation – meaning the value of money goes up – is also a good thing since we need less money to pay for goods and services.

With this said; do you know what our enemies real concern is? Deflation may “prevent monetary policies from stabilizing the economy” because of a mechanism called the liquidity trap which essentially means that central banks and politicians lose control of the economy.

The “problem” economists (and their fellow criminals) see, and what also is one of the reasons for the massive bail-outs and stimulus packages being thrown everywhere, is that deflation is said to cause “credit-crunches” (really another word for liquidity trap). What they mean is that less money in the system leads to people buying less hence we end up in a recession, and/or GDP goes down because less money exchanging hands means lower GDP then if more money changes hands. This is, of course, not true.

In order to combat the horrifying deflation and get people buying stuff again, central banks and politicians have decided to use Gutenberg’s marvel; the printing press!

Basically what they are doing is throwing money into the system which, partly, according to above, is meant to get spending going again, but it is also partly to pay off debt (or increase income) and this in two ways.

The first way is that they use newly printed money to pay off loans. More specifically, in our situation, they are printing money to loan money on. Sounds strange don’t it? The government prints money and says; “Hey you, come buy our country’s debt”. Often they even buy that debt from themselves...

Putting aside, for a moment, the inflation growing from this bamboozle, it also means that all the money pouring in might trigger some illusions that get spending going. Since most of this money first goes to banks, financial institutes and the government it means, among other things, that - ta-dah! – Prices on stocks go up! Surprise then that many stock markets are overvalued with around 40 percent at the moment, don’t you think?

But the real deception isn’t how they trick markets with fictitious money printed out of thin air, oh no, not at all. The real scam comes from how the money loses in value. You see, whenever there’s more of something then before, each piece becomes worth less. If you double the money supply you’ll effectively reduced each note’s value with 50%. If we at any given moment increase the number of notes in the economy this happens, however, the taxes stay the same…

Did you get that?

Do you understand?

If the value of each note reduces in value it means that prices go up and we get the salary-price-spiral. But since taxation is based on prices and the number of notes you earn, it means that taxation also have increased. It’s a hidden tax, and this is the main reasons why our enemies, the politicians, don’t want you to know what inflation is.

Ever wondered why our grandparents could survive on one job per family while we today hardly can manage with two? This is why.

4 UNDERSTAND THIS: the government earns money on inflation because taxes go up!

5 UNDERSTAND THIS: inflation is an increase in money supply which leads to prices going up, not the other way around as we’ve been told.

And so, the conclusion for any union going into negotiations with employer organizations, especially the public ones, is to demand increases that at least equal that of CPI numbers. Since our GDP is on minus at the moment and interest rates are zero, unions could probably lay their claims even higher.

And then you all should demand that the government and the central bank stop injecting the economy with inflation (more money). As long as they don’t stop doing this, demand higher and higher salary until the level at least doesn’t mean a lost in income.

Some of you who know the basics of economy may argue I’ve simplified too much, but that’s the point. People need to understand and so let’s recap:

1 UNDERSTAND THIS: Prices going up is the consequence of inflation!

2 UNDERSTAND THIS: the only entities that can cause inflation are the central bank and your government.

3 UNDERSTAND THIS: what is relevant with your salary or the money is what you can buy with it, not what it says on the money or how much of it you have.

4 UNDERSTAND THIS: the government earns money on inflation because taxes go up!

5 UNDERSTAND THIS: inflation is an increase in money supply which leads to prices going up, not the other way around as we’ve been told.

Lastly I need to say that during an economic slowdown, salaries should go down, but they should be going down through negotiations and union understanding of how a company needs to show profits, not because of politician schemes and central bank trickery.

They are lying to you! They are increasing your taxes without telling you! Even a tax-cut may actually be the opposite because of inflation! The central bank that creates inflation wants you to have a lower salary!

If you’re not angry enough to be out looking for a good tree and a hardy rope by now, you haven’t grasp what I’ve just told you. Go to the beginning and read it once more.