Patriot,

This holiday season, families across America are gaping at the
high price of everything.

Politicians know inflation is a big problem for their
constituents in election season, so they've always looked for a
scapegoat to deflect blame from themselves.

But of course, the real cause of inflation is the Federal Reserve
and the politicians who enable it.

When you have discussions around the dinner table with family
members who don't agree with your politics, hopefully my column
below will provide you more arrows for your intellectual quiver
to explain that yes, the government is responsible for price
inflation.

And if you support Campaign for Liberty's efforts to Audit the
Fed and one day end it, please support Campaign for Liberty with
a contribution.
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For Liberty,

Ron Paul

Biden, Media Gaslight People about Inflation

President Biden recently repeated the claim that high prices are
caused by greedy businesses. Biden is not alone in trying to
gaslight the people into thinking price inflation is rooted in
the actions of private individuals and not the fiat money system
Americans have lived under since 1971.

In the media we see excessive consumer spending on luxury items,
for example, being blamed for continued price inflation. The fact
is that increased consumer demand can only cause prices to rise
in those sectors of the economy subject to the increased demand.
Prices increasing across the economy are always the result of the
Federal Reserve's conduct of monetary policy.

Trying to minimize the harm of inflation, some people in
government and media will insist that, while many prices for
goods are higher than they were pre-lockdown, they are still
lower than were prices in the 1990s when you consider that the
quality of these goods has increased. The argument is that buyers
are getting higher value today than 30 years ago. Of course, any
increased quality is because of market-driven innovation.

If America had a free-market monetary system, instead of central
bank-controlled fiat currency, prices would drop as quality
increases.

It is also important not to ignore the fact that the Federal
Reserve's devaluation of the dollar's purchasing power creates an
incentive for individuals to spend money as soon as they receive
it and a disincentive for them to save. This is because the
dollar will have less value a year from now than today.
Therefore, high levels of spending are a rational response to an
irrational fiat money system.

High prices and supply shortages were inevitable after the
lockdowns. However, prices would have adjusted back more if the
Federal Reserve had not pushed interest rates to zero. While the
Fed has raised interest rates, it has not raised rates to
anywhere near where they would likely be in a free market. In
fact, rates are not at historically high levels, yet many worry
the Fed's rate increases are pushing the economy toward a
recession. This shows how addicted Americans are to the Fed's
"easy money,"

When the dollar's purchasing power erodes, workers will seek
higher wages. This is why periods of high price inflation are
accompanied by strikes and other types of union activity aimed at
increasing wages. This has made unions another popular scapegoat
for price inflation when the truth is that Fed-caused price
increases are the real reasons behind labor unrest.

Sadly, the increase in nominal wages gained by the recent series
of strikes is unlikely to keep up with the declining real wages
resulting from the Federal Reserve's assault on the dollar's
value.

This is why, contrary to the claims of many progressives, working
people are the victims, not the beneficiaries, of price
inflation.

As a Texas union official once told me, "Gold has always been the
friend of the worker." This makes sense because gold is money
whose value cannot be manipulated by the central bank.

Inflation is the act of money creation by the Fed, and high
prices are a symptom of inflation, not a cause, and not the fault
of greedy business, consumers, and unions. The Federal Reserve is
also the engine of the welfare-warfare state.

Therefore, to restore a system of limited government, individual
liberty, and free markets, Congress must cut spending and audit
and then end the Fed.


Donate to Campaign for Liberty:
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If you would like to make a donation by mail, please send your
check to Campaign for Liberty, PO Box 104, Lake Jackson TX 77566
or you can call 703-865-7162.

The mission of Campaign for Liberty is to promote and defend the
great American principles of individual liberty, constitutional
government, sound money, free markets, and a constitutional
foreign policy, by means of education, issue advocacy, and
grassroots mobilization.

© Campaign for Liberty, 2012. Paid for by Campaign for Liberty
and not authorized by any candidate or candidate's committee.

Because of Campaign For Liberty's tax-exempt status under IRC
Sec. 501(C)(4) and its state and federal legislative activities,
contributions are not tax deductible as charitable contributions
(IRC § 170) or as business deductions (IRC §
162(e)(1)).

www.CampaignForLiberty.org


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