“The way to Hell is paved with good intentions,” famously stated Karl Marx in Das Kapital.
Marx criticized capitalists for their audacity in using their own resources to generate more wealth. However, he often missed the mark. The reality is that the path to despair is not just lined with good intentions; instead, it is constructed from grift, corruption, and counterfeit money, with good intentions merely sprinkled on top for appearance’s sake.
To truly comprehend the surging inflation rates we see today, one must grasp this fundamental truth.
Currently, the United States is operating with a fraudulent currency controlled by central planners. This is exactly what Marx envisioned in Point No. 5 of his Communist Manifesto:
“No. 5. Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.”
Indeed, the Federal Reserve System, established by an Act of Congress in 1913, serves as a national bank that politically manipulates interest rates and holds a monopoly on legal counterfeiting in the country.
Thanks to the Fed’s aggressive policies on credit expansion, the U.S. government has accumulated a national debt exceeding $28 trillion. The recent record trade deficit of $74.4 billion in March would not have been achievable without its intervention. Likewise, without the Fed’s relentless printing of money, annual budget deficits would not have surpassed $3 trillion.
In essence, centralized control of credit invariably leads to inflation in the money supply, which then manifests in asset and consumer price increases in unpredictable ways.
These market distortions are not merely flaws of capitalism; they are telltale signs of a fraudulent currency managed by central authorities.
The Nobel Planner
The economy is a complex, living entity that is constantly evolving and adjusting. Relationships within it can dramatically shift in a short time, as supply and demand continually respond to fluctuating market conditions.
This dynamic environment allows for natural adjustments to supply shortages or surpluses. In a moderately free market, for instance, even if a wheat shortage arises, bakeries do not simply run out of bread. Instead, bread prices rise, prompting consumers to alter their spending patterns accordingly.
In contrast, centrally planned economies often suffer from chronic shortages. Bureaucrats, equipped only with reports and charts, struggle to set the right prices for everyday items. The sheer complexity of the market is beyond their control.
With the noblest intentions, planners attempt to dictate price controls. Yet, graft and corruption often ensue, directing counterfeit money toward select industries and producers, leading to chaos.
In some cases, the supply of a commodity may be adequate, but with artificially low prices enforced by administrators, consumers will demand more than is available. Consequently, store shelves remain perpetually bare.
While standard measurements are essential for consistency in manufacturing and effective communication, imposing fixed prices for goods and services through a central authority proves disastrous. The failures of this approach were evident in the centrally planned economies of the former Eastern Bloc during the latter half of the 20th century.
Without market-driven prices established through voluntary exchange, it becomes impossible to reflect actual conditions accurately. This leads to a distorted relationship between production and consumption, resulting in extreme oversupply or scarcity.
Karl Marx’s Road to Hell is Paved with Fake Money
Central planners consistently misjudge market dynamics, leading to absurd outcomes. In socialist economies, for instance, one often encounters supermarkets with extensive lines and empty shelves. Shockingly, in some cases, public restrooms lack toilet seats. How did this happen?
Tragically, price controls extend beyond merely goods and services. The United States, along with Europe and Japan, has been working hard in the early 21st century to showcase how the experiences of the old Eastern Bloc are also relevant to credit markets.
Just like goods, credit also has a price attached, represented by the interest rate charged by lenders. Fixing the price of credit by a central authority, such as the Federal Reserve, European Central Bank, or Bank of Japan, has proven equally problematic.
Anyone observing the world can discern numerous anomalies: housing prices skyrocketing far beyond income levels, total household debt reaching $14.56 trillion, the rise of cryptocurrency millionaires, and an entire generation of Millennials burdened with $1.57 trillion in student loans for degrees that have lost their value compared to previous generations’ high school diplomas.
These instances represent significant misallocations of capital and would never have reached such proportions without the Fed’s price controls and monetary manipulation.
Ultimately, government intervention consistently results in stagnation, inflation, declining living standards, and widespread social unrest. This cycle appears destined to repeat itself.
True capitalism relies on a sound currency and market-driven pricing. As prices continue to rise in the coming weeks, remember to scrutinize the claims of politicians and central planners—individuals like Alexandria Ocasio-Cortez and Janet Yellen—who may attempt to attribute inflation to greedy capitalists or price gougers.
Do not be swayed by their narratives. Instead, trace the roots of counterfeit money back to its origin…
There, you will find the Federal Reserve, diligently paving the way along Karl Marx’s road to despair.
Buckle up!
Sincerely,
MN Gordon
for Economic Prism
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