Complimentary StoryFebruary 2023
The amazing thing about oil company executives is that they are only greedy when prices are high. Two years ago when almost nobody was able to drive and when they had to keep their product moving through the pipelines at $0.00 a barrel, oil barons weren't greedy at all. They were positively generous! Zero dollars and zero cents!
Or are they perhaps equally greedy at all times, and charge as much as they can charge at all times, but competition keeps them from doubling the price they charge at the pump? Because if Acme Oil executives suddenly got greedy and decided that $10 gas would be good for them, what do you suppose Apex Oil executives would do? That's right, Apex and other corporations would say “Hey, I can make a killing for a lot less than that!” and not charge $10. Acme would have to come down, no matter how greedy they might be. And that, in fact, is what happens.
During periods of inflation, people have always expressed their outrage at the greedy price-raisers. By popular demand, price controls or rent controls are imposed by governments. (They have never worked. They have only caused shortages, which cause hoarding, which cause more shortages.) Luther is on record as denouncing the greedy merchants five centuries ago. Some of us remember Gerald Ford’s feckless “Whip Inflation Now” buttons, which weren’t any more effective than the next round of congressional hearings will be. Congress has repeatedly tried to fix the blame for high fuel prices on greedy oil company executives — who have been investigated and exonerated again and again. As they will be this time, because it isn’t their fault. Unfortunately, the oil barons don’t get to investigate Congress.
The cause of inflation is now so undeniable that Milton Friedman got a Nobel Prize for explaining it. Unfortunately, Friedman was too smart to explain it to ordinary folks like you and me — he just explained it to other economists. Fortunately, one of the things you study in seminary is the art of the sermon illustration — making difficult abstractions simple and understandable for non-experts. Within one paragraph, you are going to understand inflation and stop blaming greedy businessmen and landlords for it.
Friedman studied inflation throughout the ages and proved that it wasn’t caused by paper money or the greed of merchants and landlords. He discovered that inflation, ruinous inflation, could happen even when the currency was as hard as silver coins and gold bars and when there were no budget deficits. Shiploads of Aztec and Inca gold caused inflation in Spain when there was no paper money and no deficits. Friedman summed it all up in one sentence: “Inflation is always and everywhere a monetary phenomenon.” Unfortunately, he didn’t take the next step, of making it clear to the layman. So let me translate Friedman into English for you: Inflation only occurs when your government goes into the counterfeiting racket.
Memorize that sentence. It’s one of the most important you’ll ever read.
The Biden administration has printed 80% of the currency now in circulation, and most of it is counterfeit. Or “part counterfeit,” which makes it impossible to detect.
To help you understand some of the numbers that get tossed around, a bundle of hundreds is $10,000. A big man’s handful is $100,000 and a small suitcase is a million. A large truck full of hundreds is a billion dollars. A trillion would require a caravan of semis most of a mile long. But the Biden administration has printed TRAINLOADS of unbacked hundred dollar bills, or — what is just the same — has reloaded EBT and Social Security cards and various forms of welfare with unbacked electronic billions. This unbacked money is far out of balance with the production of goods and services, so prices soar — and the people who have it first, namely the government counterfeiters, get all the benefit. The people who get it last, namely you, pay all the costs.
When politicians and bureaucrats have gotten away with printing all that money, instead of having to work for it, naturally they’ll be willing to pay more than you will for anything that you both want, and they’ll bid up the price. So the Democrats are buying up your land and labor, property and votes, with money that comes off a printing press. They don’t even have to do the hard political work of raising and collecting taxes. They just print documents that drain the value out of your bank and retirement accounts. The Biden regime robbed me of $20,000 last year and didn’t even need masks and guns to steal it. They probably stole ten or a hundred times as much from you. “He who earns money puts it into a bag with holes,” the prophet Haggai said (1:6).
Inflation is caused by greed, all right. But it’s not the greed of people who are requiring more money to fill your tank or grocery cart, and it’s not the greed of your landlord or the electric company. It’s the greed of people at Zip Code 20006 and their criminal co-conspirators in Congress.
Do you know by heart the sentence in bold italics above? Go back and memorize it or be deceived and victimized for the rest of your life.