Inflation Is a Deliberate Government Policy.

Saturday, May 27, 2023, Mernickle 64, Home of Alternative Economics, and Contrary Reviews. Today, we're gonna look at why inflation is still a deliberate policy in the UK and all other countries for that matter, but I'm gonna focus on the UK. And if you're somewhere else in the world you can extrapolate that to your own country. And of course, we have to understand that inflation is the

abnormal increase in the supply of currency and credit in the economy. And it's usually only possible in a fee at currency regime. And you just have to look at the Bank of England inflation calculator during the gold standard from after the Napoleonic Wars until 1914. When the UK and yes, suspended convertibility of the currency into gold at a fixed rate, i.e. dropped the gold standard, we

had average annual inflation of minus 0.1 for all those years after the end of the Napoleonic Wars until 1914. And the economy did very well. So, I'm gonna focus on the economy. So, the fallacy, that deflation or lower prices or prices that don't go up is bad for the economy, is a total can's in fallacy. So, I said that the policy is still a deliberate policy

of inflating the currency. And why is it deliberate? Well, because in a fee at currency regime, the other thing is that the economy is still in the UK. The side of the currency is the debt, the national debt, the mortgage debt, the consumer debt, anything that creates currency. It's not just the guilds, of course, the government debt, but also the mortgage debt because when a mortgage

company or a bank issues a mortgage and credits your account so you can buy that house, it gives you purchasing power. The same thing goes for credit card. And you borrow money on a credit card, you issuing currency. And the only way to control the issuance of the currency is through interest rates. And the Bank of England and all other central banks for that matter have

kept rates too low for too long. As you can see by this chart here, of the Bank of England base rate, compared to the RPI and money. Why do I use the RPI? Well, because that's a much better reflection of the debatement of the currency, I would say, because it includes a much bigger basket of goods and services, of assets that affects the average household in

the UK. You can see that prior to 2008 and 2009, the Bank of England base rate was very much so above the bank. And it kept inflation somewhat in check. It didn't perfectly do so because we're still having inflation prior to 2008 and 2009. And by inflation, I mean the debatement of the currency. But as you can see, even now, I've just adjusted that chart to

give you the latest RPI at 11, I think is about 11.1 and the base rate at 4.5. We have a negative real rate and we've had that since 0809 and this is unprecedented. So that's why I'm saying it's a deliberate policy that they have of inflating. So with all that's going on with our economy, with our currency, with inflation, I've got a couple of special deals

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and I'm going to go through this article. This is from the telegraph from from last night. Len Lord mortgage crisis on track to trigger the sale of 735,000 rental homes. So I'm going to go through this and this is not just to show you what's happening in the bitalette market. But just to give you an idea of the government and even economists, the most sense of

what's going on and what they think will be enough to rein in inflation. And I think they're way out of, yeah, they're way out of the solutions. They're digging even deeper. So Exodus from the Latin market is expected to compound an existing supply crunch. It's being forced to sell more than 700,000 properties because of rising interest rates. Economists have warned, as Jeremy Hunt said, he would

tolerate a recession to bring inflation down. Around 735,000 properties will be lost from the rental market. If rates hit 5% according to analysis by capital economics. As an affordable mortgage cost trigger a wave of forced sales. So I'm just going to stop here a second. I've been warning you. If you've watched my videos closely and I make a video every day and I've been talking about

this for months that to expect inflation to come under control when you have CPI and RPI in double digits. I know the RPI is dropped now to 8.7. But if you expect this to come under control when your rates are only around 4.5. I've been telling people that that won't do. But the Bank of England and even the city economists, the government, they thought they could

just say, oh, inflation is going to have and rates are going to top around 4.5.4.5. And here we are now. And they have had to admit that it wasn't enough. But now they're saying that we only need to go to around 5. Or maybe just above 5. And I'm telling you here and you're hearing it first. For me, that's not going to be enough either. And

that's why I'm saying it's a deliberate policy. So let's continue. It came as Mr. Hunt, the Chancellor admitted in the Sky News interview that he would be comfortable with a recession caused by higher interest rates. Mr. Hunt said controlling inflation was worth the pain of a short term slow down. He's not going to control inflation because I'm sure he would not be for double digit interest

rates because that's what's needed. Yes, we need to look back. We're going to go back to 0809, all the inflation that has been created since then, that's still in the system. So a 5% or 5.5% rate or even 6% base rate will not do it. Stubbornly high inflation has spooked markets triggering a jump in borrowing costs and interest rate expectations. There are growing fears that higher

interest rates could tip Britain into reset. So the next question yields on two year yields are now higher than those on the 10 year yields. Signaling that investors are concerned about short term prospects for the economy, inverted yield curve. City, I don't think that's the major point here though. Let's continue. And it's not just going to be the bike to let crown that's going to be

hurt. Everyone's going to be hurt. The government because as a lot of debt to service and a lot of new debt to issue. At higher rates, it's going to be those who are renewing their mortgage deals. It's going to be people who have credit card loans. Anyone who borrows. City traders have placed their biggest bets on recession since February. When there were widespread forecasts of a

major downturn from the bank of England and the IMF. The chancellor accepted two year short markets. That inflation was being brought under control on Friday. Well, he's been saying that since he's taken over after Quartank. Sorry. Ask by Sky News if he was comfortable with a bank acting to bring down inflation. If it could be, if it could precipitate a recession, Mr. Hunt said, yes, because

in the end inflation is a source of instability. And he continues, if we want to have prosperity to grow the economy to reduce the risk of recession, we have to support the bank of England in the difficult decisions that they take. Well, it's not a difficult decision to raise rates to 5% when inflation is running in double digits. The difficult decision would have been not to

do QE and not to bring rates almost as a result. But it's not a zero in 2020. That would have been the difficult decision. But unfortunately, we're paying for all those bad decisions right now. He added. I have to do something else. It just, which is to make sure the decisions that I take as chancellor, very difficult decisions to balance the books. So that the markets,

the world can see that Britain is a country that pays its way. All these things mean the monetary policy of the bank of England and fiscal policy by the chancellor are aligned. While I haven't seen balanced books in decades. And by balanced books, I mean a budget, a balanced budget or a budget surplus. We're running, we've been running deficits, never ending deficits for a couple of

decades now. Capital economics said landlords are being forced to sell their properties because of a government decision to slash tax relief on mortgage interest payments, pushing up their costs. It warned that increased mortgage rates will lead to the loss of hundreds of thousands of rental properties from the market by 2027 compared with 2021 figures. And here we've got the Keynes and fallacy. I would even say

that capital economics doesn't really understand what's going on here. Because they say the analysis is based on predictions that the bank rate will peak at 5%. And remain above 2.5% until the end of 2027. Where do they get 2.5%? Are they like smoking something? No, rates are going to have to be at double digits. Markets now expect interest rates to peak at 5.5%. Well, I guess

markets can be wrong as well. And I think they are. Meaning the damage to landlords would likely be even worse. So I think it's going to be even worse than the market thinks. I'm not going to go through the rest of this article. You can read it. I'm going to put a link to it under archive.ph. It is in the daily telegraph. So if you don't

subscribe to the daily telegraph, you'll be able to read it for free. But it's just got a few comments from a couple of other politicians who have no clue either. That's all I would say. And I might sound a little bit arrogant to say they have no clue. But I think that's a good thing. If you look at my videos, my warnings for the last six,

seven, eight years that we have had a deliberate policy of inflation, mainly because we've got so much debt as a nation. And I'm not just blaming the UK here. Other countries as well. Well, look at the US. They're even more up to here in that. That the only way to pay off that debt is in current state. You see that is worthless. And that's what they're

going to do. What if they don't do that, you might ask. What if they let everything collapse? Well, it might collapse. Not that they want it to collapse because I think politicians, central bankers and Wall Street and the city of London don't want that. It will hurt them massively. So yeah, even if that were to have something outside the system, something that holds its value, something

that's not related to the system, like stocks and bonds. So. And the inflation as well. We're seeing like indices like the Nasdaq rebound massively. And I would say if the Nasdaq is able to keep going higher from where we are and actually make a new high. And eventually this would show to me that we're pretty close to a face transition into much higher inflation. That's very

dangerous. That could lead to the loss of confidence in the currency, which we all know is the crack up boom or hyper inflation. We're not there yet. But either way, I think. Yeah, the policy is deliberate debatement. And they're going to. Keep you like in the game saying, oh, we're going to fight inflation rates are going to go a little higher. And we're going to bring

down inflation. But they've been saying that now for the last year or nine months. And they're going to keep saying it again. And every time it's going to go higher, they're going to keep digging even deeper, an even deeper hole. That's what they're going to do. They're going to get hurt. The middle class, the wage earner, the pensioners. Yeah, they're going to get hurt. Politicians, of

course, they can always give themselves pay rises. We just saw Boris Johnson buy an almost four million pound house. He stayed for free in a rent rented a property in the best area of London for free. Actually, from one of the most important things. There's political donors. So there's a lot of corruption out there as well. And it's not just here in the UK. And that's

all a symptom of what's going on with the currency with the inflation. You get a lot of. Yeah, this respect for authority and government. I think that's going out the window. And these are just symptoms of yet end of a currency, I would say. Or a period of. Very high inflation that could eventually become hyperinflation. With that, I'm going to wish you all a very good