First they ignore inflation, then they deny inflation, then they tell you inflation is good, and finally, they blame it on somebody else.
Central banks have been lying about inflation, since their inception. Their lies were exposed by Argentarius over 100 years ago. Yet to this day, people believe the same old claims.
The only way we can prevent history from repeating itself, is to study history.
The terrible effect, dear James, which an arbitrary increase in money has on the ‘value of money’, i.e. on the size of the claim to goods embodied in money, is usually only recognised rather late. The effect must already be quite profound, the deterioration of money must have reached an ominous degree, before the state or the central banks admit that the devaluation of money is a consequence of their own wrong monetary policy. But once they have recognised this and publicly admitted the connection between the devaluation of money and so-called ‘inflation’, something happens that could be called amusing if it did not have such serious consequences. The state or the central bank then try to mitigate inflation in a very specific way, in a way that clearly shows that one can suspect the connection between monetary debasement and inflation and still have very amateurish views about money.Alfred Lansburgh: The Essence of Money – Part i. On money
Particularly eerie is the fact that already a century ago, central banks were trying to get people to use “cashless” methods of payments.
Even more horrible is the fact that today, the banks are even more disingenuous about the reason they want to get rid of cash. They tell us it is “to combat money laundering”, when in fact they want to be able to inflate or deflate the money supply at will.
There is no doubt that it was a mistake to issue such large quantities of banknotes and thereby weaken the value of money. It would therefore be necessary to attempt to withdraw a part of the banknotes, but in such a way that no holder of a banknote suffers a loss as a result. Cashless payment transactions are best suited for this purpose.Alfred Lansburgh: The Essence of Money – Part i. On money
And unsurprisingly the calls for central bank currencies, which means nothing else than citizens having an account directly with central banks, is not new either.
The reasoning behind it, is that this way the central bank can print money (or destroy it) directly without the middle men in the commercial banks. Which is precisely why they weren’t given this power in their mandates because this would give them far too much power.
The concept of digital central bank currencies (CBDC) is even more insidious, however. Because unlike the analog ledgers of the last century, a digital ledger would be much less difficult to manipulate and can be coupled to personal information; creating a social credit score that goes deeper into society than anything Orwell imagined in 1984.
Therefore, it’s imperative that we defend ourselves against this power grab by buying the only asset they cannot manipulate – Bitcoin.
That is why, my dear son, you will always hear the praise of cashless payments sung when inflation and monetary distress have reached a high level. With pleas and threats, with enlightening writings and with the well-known imperatives (‘Pay cashless!!!’ ‘Promote remittances’ ‘Fight inflation!’), the public is urged to hand in their banknotes and have an account opened for them, either with the central bank itself or with another bank which in turn has non-cash dealings with the central bank. In fact, the propaganda is usually successful. The private credit balances at the banks, the bank credit balances at the central bank experience a considerable increase, which clearly shows how much banknotes would have had to be issued if the public did not now often pay by cheque and transfer instead of banknotes. Only one thing remains missing, and that is – success.Alfred Lansburgh: The Essence of Money – Part i. On money
The reason central bankers can pull this scam on us is that so few people understand what money really is. (And I suspect even many central bankers don’t.)
Namely, a right, born out of a transaction. Money’s sole purpose is to represent and guarantee that a good or service that has been delivered, is correctly compensated for with other goods or services.
As I said, this would be very amusing if it did not show in such a frightening way at what a low level the knowledge of money and its laws still stands, even when one has finally understood the connection between inflation and monetary distress. For, to put it briefly, my dear fellow: the whole idea of wanting to fight inflation by promoting cashless circulation is hare-brained nonsense. Cashless transport may be a very useful institution under certain circumstances (by no means always!). But it cannot counter inflation for one very simple reason, namely because it is – itself – a part of inflation. Money, it cannot be said often enough and loudly enough, is not only identical with the monetary signs that one encounters in traffic. In its essence, money is nothing material at all, but something abstract: a right to purchase goods. Whether this right is embodied in gold bars, in coins, in cash notes, in bank notes, or finally in current account balances, is completely irrelevant. The only thing that matters is that there are only so many rights to draw goods as the traffic with its daily services and counter-services generates from itself.Alfred Lansburgh: The Essence of Money – Part i. On money
So please don’t be fooled, cashless payments neither fight inflation nor money laungering.
And every note, every sight deposit arbitrarily created by the state or a bank is surplus, bad money. Whether the arbitrarily issued banknotes are left to circulate quietly or whether they are withdrawn and replaced by book credits, so-called ‘giro money’, is of no importance. Or have the wrongfully issued rights to goods been eliminated because they no longer pass from hand to hand in physical notes but in incorporeal giro money? Will even one single iota of purchasing power in the country be exercised less if payment is made in non-cash instead of cash? And that is what matters: Less purchasing power must be exercised if one wants to reduce the price of goods or, which is the same thing, increase the ‘value of money’.Alfred Lansburgh: The Essence of Money – Part i. On money