Inflation in Practice
U.S. consumer spending hovers around $19 trillion per year.
Wealth holdings in stocks sit at about $64 trillion in the U.S.
Of that $64 trillion in stock holdings, the bottom 95% of U.S. households own only about $5 trillion.
Why are those three little factoids important? Because they explain why everything is so expensive.
I have been criticized by many for saying that using
money to demand more money via usury and speculation is inflationary. My critics are technically correct and practically wrong. Inflation is caused when the government prints more money, and just because demand for something goes up does not mean the government will print more money. In fact, it will typically do the opposite if demand for cars, houses, or anything else goes sky-high. It is actually when demand for everything goes down that the Federal Reserve steps in and prints more
money.
So why do I make such a bold statement? Because of the three little factoids listed above and the simple conclusions we can draw from them.
If we do some simple addition, we learn that there is roughly $83 trillion floating around the U.S. economy (minus bonds and crypto) at any
given time. However, only 22% of that is used to buy tangible goods and services. And they wonder why I claim the stock market is not actually tied to production.
If the money in the stock market were funding production, then why does the budget for “production” ($64T) so dramatically outweigh the actual return from production ($19T)? If the stock market were put through the same litmus test that any business is
subjected to, it would be deep in the red. Of course, I must digress here, because this is not a perfect apples-to-apples comparison, but I think you get the point.
Back to the crux of the matter.
I call the stock market inflationary because it naturally incentivizes dollars to chase more dollars without
producing anything, thus creating more money but not more tangible supply. If supply remains low while the number of dollars increases, the value of the dollar goes down and wealth naturally becomes centralized in the hands of the few.
But wait, where did the $64 trillion come from in the first place? If new money is only created when the Federal Reserve prints it, how did we end up with so
much?
In short, the economy can create more money without the printing presses at the Fed. Money lending (aka usury), government deficits, foreign dollars entering the U.S., and shadow banking all lead to increases in the money supply.
So, you see, usury and speculation play off each other to increase the
money supply, yet neither adds value to what a human being actually needs, namely food, shelter, and the like. The end result is lots of money floating in the ether, heavily concentrated, while no value is added to necessities. Meanwhile, the costs of those necessities rise at the same astronomical rate as the gap between where the money is held…consumer pockets versus so-called securities.
This all
leads to the devaluation of the dollar, which is why I constantly say that the stock market and usury are inflationary. Because inflation, at its core, simply means your dollar gets you less.
I intentionally kept the spiritual component out of this essay. The spiritual damage caused by usury and speculation is grave and serious, but the economic realities alone should be enough to make us all want to
change our ways.
At some point, we have to stop pretending this is complicated. An economy where money exists primarily to chase more money will always erode the value of work, production, and human dignity. The rising cost of living is not a mystery, nor is it accidental, it is the natural consequence of prioritizing speculation over production and usury over stewardship. If we continue down this
path, we will keep asking why life feels unaffordable while refusing to question the systems that made it that way.
