It’s the ‘Anti-Tower of Babel’ philosophy.
In this case, they all speak different languages (or at least with different accents)…
But they understand each other perfectly well.
No translation necessary.
We speak, of course, of the world’s central bankers.
To know what one thinks is to know what they all think. We’ll share with you an example of that today…
Different Languages, Same Outcome
Recently, we’ve shared our take on what we believe is really going on with the so-called fight against inflation.
Our take is there isn’t a fight going on at all. The central bankers are more than happy to see a higher inflation rate…
As long as it’s not too high.
It’s a managed inflation, if you like.
That means keeping it around the 3% mark… while pretending they’re trying to push it lower.
They don’t fool us.
The plan is clear. The higher the inflation rate, the greater the tax revenues for the government… the greater the debasement (devaluation) of the currency and savings… and the easier it is for the government to repay debt.
Not, to be clear, to reduce the overall debt burden… but so they can borrow more and keep the cycle going.
Getting back to our point, we refer to the goings-on in Australia and a comment from one of their central bankers as reported in the Melbourne Age newspaper:
But [Steven] Kennedy said adjusting tax brackets for inflation during a period of rapid price increases would feed money back into the economy, making it more difficult to bring inflation under control.
He said that in Australia over the past three years, bracket creep had helped reduce inflationary pressures, which otherwise would have been amplified if tax thresholds had been pushed up.
We won’t bore you with the full context except to paraphrase this way: Central bankers believe your money is better off in the government’s hands than in your own.
The idea that tax cuts are inflationary is hogwash. To start, it assumes the government doesn’t spend the money the taxpayer would have otherwise spent.
We know that’s nonsense since governments worldwide are up to their snouts in debt. The truth is that tax cuts are likely to be less inflationary as many folks would choose to save rather than spend.
Not all, but many.
And we know that’s true because a big reason governments and central banks kept cutting interest rates in the years after 2009 was because they didn’t want folks to save… they wanted them to spend… because there wasn’t enough inflation.
Governments don’t want you, the public, to have the money in your hands because it loosens the government’s grip… its control.
If folks save their money and don’t spend it, tax revenues will fall… inflation will fall… and it will make it exponentially harder for the government to keep the debt cycle going.
It doesn’t matter whether it’s in Washington D.C., Paris, London, Sydney, Ottawa… or anywhere else. The central bankers are all speaking the same language.
It’s the language of government and central bank control… and the gradual impoverishment of the masses through inflation.
Let’s not make any mistake about that.
Cheers,
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Kris Sayce
Editor, The Daily Cut