Back on 5-April, for you, I exposed the parties responsible for inflation in the work What Has Caused the 2021-2022 Inflation in the USA? A Shocking $8.5 trillion of US Treasuries and Mortgage-Backed Securities on the Federal Reserve Balance Sheet. Will Quantitative Tightening Ever Happen? Those parties are the Federal Reserve and the United States Congress.
In that work, and as you can see in the graph, Federal Reserve central bankers have been monetizing the debt of Congress since 2009. Today, central bankers and eggheads in academia call that "Quantitative Easing." When the Federal Reserve was founded between 1907 and 1913, the concept was known as "an elastic currency." During my days in which I earned my economics degree by being taught by Ivy League PhDs , they called it Open Market Operations.
What Money? It Is all Bank Credits!
First, you must understand that you live under a fiduciary monetary system of irredeemable bank note currency. You do not have money. No one does. Money, were it to exist, would be coined metal by weight and fineness. Money could exist without bankers or government. Bank notes, i.e., bank credit in circulation, requires bankers. Legal tender requires lawgivers and their enforcers.
During the days of money, individuals would sell their money, typically gold coins, to bankers in a transaction of money for property in bank credits in what is known legally as a depositum but technically is a mutuum. This property in bank credits gave despositors claims on bank credits and hence rights of action against bankers.
Today, though, it is all bank notes. Dollars are merely Federal Reserve bank notes in circulation and all dollars are merely evidences of bank credits. Checkable deposits too are merely bank credits.
Federal Reserve central bankers can cause inflation whenever they desire merely by engaging in Quantitative Easing / Open Market Operations.
From the Greatest Inflation to the Super Depression
Cause to Effect: Inflation Then Rising Prices and the Easy CPIs
The US Bureau of Labor Statistics, the agency responsible for producing the Consumer Price Index, also publishes all of the prices that go into their CPI. Their CPI, of course, gets adjusted by a process called hedonic adustment, which, in effect makes the CPI useless.
On a page titled, Average price data (in U.S. dollars), selected items, the BLS publishes prices for eleven items. Grouping these items by their kind, food, energy (electricity and natural gas) while keeping gasoline separate, I have created what you see in the table, the "True CPI."
The prices are turned into index numbers using 2009 as a base for two periods, and 2020 for the based of another period. The first period, 2009-2019, is the original Quantitative Easing that Federal Reserve central bankers engaged in their failed attempt to end the Super Depression before Trump took office. The second period, 2020-2022, is the hyper-inflation undertaken by Federal Reserve bankers to offset the horrific effects of the politicians' imposed lock downs, lock downs, which were undertaken for the mail-in ballots scheme that rigged the 2020 Presidential election in favor of bumbling, mumbling Joe Biden.
Each index consists of the average of the price relatives. These items compose the food index: Bananas, per lb., Oranges, Navel, per lb., Bread, white, pan, per lb., Tomatoes, field grown, per lb., Chicken, fresh, whole, per lb., Eggs, grade A, large, per doz., Ground chuck, 100% beef, per lb., Milk, fresh, whole, fortified, per gal.
These items comprise the energy index: Electricity per KWH, Utility (piped) gas per therm. There is one item in the gasoline index: Gasoline, unleaded regular, per gallon.
I consider each of these a fairly good proxy for what the typical American buys whether alone or for a family. Of course, other items such a tortilla shells, spaghetti sauce and pasta could make a more robust food index.
While not perfect, this seems a much smarter way to report changes in prices to Americans and hence the effects of inflation.
The BLS way throws in all kinds of unrelated items into one index. The minions at the BLS then give various weights to the items according to hypothetical consumption amounts. It should be obvious that adding ever more items reduces the average. This way, the US government, through its cooperative conspirators, establishment mass media, can convince Americans in a psychological operation that prices have not risen as high as prices in fact have.
As you can see, between 2009 and 2019, inflation translated into a 9.7% rise in food prices. Yet, in the shorter period of recent times, 2020-2022, stimmy check inflation resulted in a walloping 16.8% rise in food prices.
Not so surprisingly, energy fell -7.2% during the period of 2009-2019. That is owing to the so-called Shale Revolution in the USA, which unleashed much natural gas. Along with this super abundance of natural gas, even more electricity generation converted to natural gas.
Gasoline prices rose 44.8% in this period along with a staggering 68% rise during Biden-Pelosi-Schumer's America Rescue Plan. The latter price rise certainly came from all of the extra bank credits stuffed into the accounts of ordinary people while correspondingly higher output did not follow.
It is evident that stocks sell for dollars and hence have prices. Many of those conjured Fed Res bank credits ended up in stocks. Taking the S&P 500 as a proxy for the US stock market, stocks gained 291.2% during the 2009-2019 period and overall, an eye-popping 448.6% between the overall period of Quantitative Easing, 2009-2022.
Within those overall giant-sized stock market rises were the rises of tech stocks and other so-called growth stocks. The Invesco QQQ ETF stands as a good proxy for those stocks.
Where Did the Dollars Go View?
Another way to look at it, is to show where the dollars went.
Gab It
