Why Are Prices Going Up?

February 23, 2011

by Russell D. Longcore

Simple. Prices are going up worldwide because Washington has not maintained the value of the world reserve currency, the US Dollar. Washington has flooded the world with dollars (fiat currency), which causes inflation. Inflation is the erosion of the purchasing power of a unit of currency. Only governments can create inflation.

The mainstream media, in lockstep with governments that have embraced Keynesian economics, keep telling you that increased prices are the same as inflation. Even some dictionaries define “inflation” this way. This is one of the biggest and most cruel lies ever told. And they know, like Karl Marx before them, that a big, audacious lie told over and over will eventually be believed.

Here is the simplest example I can give. You have two gold coins, each worth $20. You place them in a depository, and they issue you two receipts for $20 each. You can use those receipts as currency. But you make two identical copies of those receipts. Now you have $80 of currency with only $40 of value. You go to a merchant and want to buy a $40 item. But merchants have found out that you counterfeited your currency, and that if they accept a $20 receipt, it will only be truly worth half, or $10. So the merchant increased the price of that $40 item to $80. It looks just like a price increase, but it’s not. You counterfeited your money, created inflation, and the merchants want to protect their purchasing power.

In like manner, governments de-coupled their currencies from gold and silver. They counterfeited their money, and now it is only worth what buyer and seller agree that it’s worth on any given day. There is no unchangeable anchor to value.

The MSM points your attention to world upheaval, and tell you that revolution in the Middle East is causing oil prices to spike. But revolution is merely a convenient diversion. I am not saying that revolution has no effect. What I am saying is that oil prices have been creeping up steadily over the last two years and that had nothing to do with revolutions.

Also, because most of the traders on Wall Street are government-school educated, they buy into the propaganda. Even if they went to private prep schools and private colleges, Keynesian economics is what is taught there. It is only the rare contrarian that understands the origins of inflation. So the major stock markets around the world are also credulous sheep.

In July 2008, world oil prices peaked at $145.00 per barrel. There were almost no shortages. We had plenty of gasoline and diesel fuel in America, but the price was above $4.00 per gallon back then.

During that period of time, I was working for a Third-Party Claims Administrator that specialized in transportation claims. That means trucking companies, the companies and vehicles that move all goods around the USA.

Truckers have to fill their fuel tanks, and they pass along the increased costs of fuel to their customers. A truck with a 100-gallon fuel tank can cost over $400 to fill the tank, and the truck might get eight miles per gallon. But tens of thousands of truckers found that they could not pass along the increased fuel cost to customers. They determined that they were losing money every time they started the engine on their truck. Consequently, tens of thousand of truckers either parked their rigs or sold them and quit trucking.

That Third-Party Administrator relied on trucking claims for their livelihood. But truckers who aren’t driving don’t have accidents. The number of incoming claims fell off dramatically. The owner laid me off due to lack of work.

World oil is peaking again. But now the peak is going to be made worse by rampant inflation because the Federal Reserve in Washington is flooding the world with paper dollars. Back in 2008, it took $145/barrel crude oil to create $4.00 per gallon gas and diesel. Now in 2011, crude oil prices are at about $85/barrel, and gas/diesel prices are at or above $3.50/gallon. If crude oil prices top $145/barrel again, prices at the pump will easily top $6.00 per gallon. There is your inflation.

As the value of money goes down, businesses and nations will do what they can to maintain their profit margins. When dollars lose their value, they lose their purchasing power. It takes more dollars to buy a product than it did previously. So, prices are increased, and the consumer foots the bill.

Transportation costs affect everything that rides in a truck. From vegetables to TVs to cars to electronics…and nearly everything in between… most everything moves by truck. Even products shipped by air have higher jet fuel prices added in, and then on top of that, the truck’s fuel price to get the goods from the plane to the merchant or customer are added in. And it’s more than just transportation costs. The farmer pays higher fuel prices for his tractors. Anything made from crude oil, like chemicals and plastics, goes up in price when crude oil prices escalate.

The stock markets worldwide are showing higher stock prices. But is that a recovery or simply inflation? I contend that it is inflation of stock prices due to the devaluation of the dollar.

But do not forget. Prices are escalating because of government inflation of money and no other reason.

There is only one way to stop inflation. The only way to stop inflation is to (1) create a monetary system based in precious metals and (2) stop fractional reserve banking and require 100% reserve banking. We know that the entire world’s financial system in based on fiat currency and fractional reserve banking. Therefore, if colony/states wish to carve out a niche in the world where their money system is based in honesty and truth, they only have one choice. The colony/state must secede and establish a precious metals-based money system. When the rest of the world has money that is losing value every day, the newly seceded nation will be the only place on the planet where money is not subject to inflation. The wealth of the world will pour into the newly seceded nation as the world seeks a safe haven for its wealth.

Secession is the Hope For Mankind. Who will be first?

DumpDC. Six Letters That Can Change History.

© Copyright 2011, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.