It’s not new money per se that causes inflation.
But how that new money is put into circulation.
Inflation is an equation.
Supply + demand = inflation or deflation.
The problem is that most of the new money that has been created since the market turn under thatcher and Reagan has gone into asset speculations.
Especially mortgages for already existing houses.
This injects new money into circulation without a corresponding increase in supply.
Because it just exchanges ownership of already existing assets.
Certain sectors of the economy (like the housing market or any other market that is highly leveraged) have been in hyperinflation for decades.
But the cpi is skewed to hide this.
The new money printed by government since 2008 has again been used by the speculators to inflate asset prices and keep the ponzi scheme of wall street and other markets going.
Not only this but because the private sector has become increasingly deregulated it has led to ever soaring profits which come from increasing prices while not increasing wages.
The government is not bad per se.
It is a tool.. a weapon if you will.
And the people that currently wield that weapon for their own interests spend billions on propaganda (check how many people own all the media outlets) to get people like me and you to disregard the very weapon they are using against us.
The answer isn’t smaller government.
The government has grown since the market turn.
The answer is to undo the neo Liberal revolution that occurred under thatcher and Reagan.
To return to a compromise between labour and capital that benefited all like we had post ww2.
A new new deal if you will.
Where private debt was only allowed for entrepreneurial endeavours that had a good chance of increasing our countries productive capacity.
The national debt is nowhere near as significant or destabilising to the economy as private debt.
Both are measures of how much new money is put into circulation (check out Richard werner for the empirical evidence that banks issue new money when they issue loans) but national debt is only 97.6 percent of gdp currently in the UK.
But private debt is expected to reach 216 percent of gdp this year again for the UK. It’s more for the US.
The national debt doesn’t demand that the economy of production and consumption pay back an interest rate year on year.
The national debt of countries like ours with a sovereign currency is serviced by the states capacity to issue new money.
But the private debt demands that the real economy of production and consumption services its debt by at least paying interest.
This means that if the UK achieves its projected growth of 4 percent of gdp thus year and the average interest rate on the private debt is 4 percent (let us suppose… I cant find the figure) then real growth is minus 4 percent of gdp.
The wealthy creditor class seek to distract us from the real issue (private debt) by making us fixate on the non issue (national debt).
In comparison to private money creation by banks the government’s oversight of money production is superp… because there is no oversight of private money production its literally a greedy free for all.
Private debt (private money creation) not national debt (national money creation) is the cause behind inflation.
Subjective insights 