June 30, 2024

The description of inflation by economists is fraudulent. Inflation is caused by any disruption of economic activity including increase in interest rates.

When economists promote increased interests rates to reduce inflation, the meaning indicates that businesses arbitrarily increase prices; so creating problems for them will force them to lower their prices. It's the other way around. Businesses sell at the lowest price possible to compete; and creating problems for them forces them to increase prices more than usual as a hedge against uncertainties in addition to increased costs with increased problems.

Is it supposed to mean that fewer items being sold will reduce the price of each item? Everyone knows, it's the other way around—that increase in volume is what reduces prices.

Instead of explaining how fewer items being sold lowers their price, economists shift to a different concept of what inflation means. They pretend that the total size of the economy increasing is inflation; so stifling the economy reduces its size, which is supposedly reducing inflation.

There is no such thing as controlling an economy. Economies can be degraded; but they can't be improved through direct manipulations. When leaving economies alone, they always improve, as each person finds ways to improve their situation; and development is the indirect method of improving economies.

The primary method of degrading economies in recent times is raising interest rates. Obviously, a lot of persons are harmed by that; yet supposedly the result is an improvement.

Inflation is caused by any type of problem that businesses acquire. Creating more problems for businesses causes prices to increase. Raising interest rates creates problems, which causes prices to increase. Yet frauds claim the opposite: that raising interest rates will lower prices.

In that logic, there is the implication that inflation correlates with economic growth; so stifling the economy should lower prices. That's shifting from increased economic activity to price of products, as if they were the same things, when they are inversely correlated. Good economies grow and reduce prices. Bad economies shrink and increase prices.

Raising interest rates creates bad economies, as cooling the economy is supposed to be the result of increased interest rates. Cooling means stifling, which is said to result in fewer persons working. That's stifling the economy, as if stifling the economy would reduce prices of products.

What are increased interest rates supposed to do? They are supposed to put people out of work by obstructing investments. Why is that a good thing? Just because fraud economists say so.

The starting point of raising interest rates is always the claim that the economy is too hot. The frauds always refer to economic expansion or growth as the indication of too hot of an economy. Otherwise, economic growth is always the desired result. Is there some point where economic growth needs to be curtailed? There is never an explanation of what level of growth should not be exceeded.

To cool the economy, stifling procedures are needed, which always means raising interest rates. Stifling the economy is always said to be a good thing in cooling the economy.

Increased interest rates reduce the money supply by making loans less available. Banks loaning money has been the primary method of increasing the money supply, at least several years ago. But since the new, high tech businesses do not have collateral at start-up, venture capitalist investing replaces bank loans. The result would be a shortage of money supply due to fewer bank loans; so quantitative easing was introduced as a method of increasing the money supply.

Global trade, being referenced to the dollar, gobbles up dollars in a lot of foreign banks. Those dollars get removed from circulation, which results in a shortage of the money supply.