Inflation/Deflation Explained (Myths Debunked)

The original definitions of inflation and deflation are respectively, increases or decreases in the volume of circulation *per* represented wealth. There is no proof whatever that an increase in circulation per represented wealth results in the claimed higher prices, or (therefore) the claimed resultant devaluation of the currency.

inflationary or deflationary


In fact, there is no logical qualification of this preposterous idea whatsoever. In fact, the whole pseudo science of contemporary “economics” is not only wholly bereft of formal proof and theorem… the whole pseudo science even relates to processes (purported “banking system”) which in fact can only multiply artificial cost upon us until we suffer the present terminal failure.

No such thing is an economy at all.

FLAW OF THE ARGUMENT(S) (AND OF THE CONTEMPORARY PSEUDO SCIENCE)

The error of this article is to presume its arguments amount to proof that increases in the volume of circulation *cause* increases in prices, and devaluation of the currency. The very term “cause” explicitly indicates an inevitable consequence. In other words, it can be truly be said that adding 2 to 2 *causes* the sum of these two addends to be 4. But if the value of a given thing is “2 units of circulation” where 2 units of circulation exist to represent the value of the thing, it *cannot* truly be said that if we introduce 2 further units of circulation, this [inevitably] *causes* the [purported] value of the thing to increase to 4 ― and the resultant value of the currency to be reduced to half its former value.

Why does this purported circulatory inflation *not* *cause* such an increase in price and decline in value of the currency?

Because, likewise it remains possible to purchase two of the things instead.

No cause of *price inflation* whatsoever therefore exists in purported *circulatory inflation*.

TWO DISTINCT THINGS

Contemporary mis-use of the term “inflation” for both [purported] inflation of the circulation *and* inflation of prices presumes wrongly therefore that two distinctly different things are one and the same; and even [wrongly too] that the latter is a consequence (“caused by”) the former.

Yet because it *would* remain possible that increasing volumes of circulation *can* instead sustain a like increasing volume of industry and commerce, no cause whatsoever can truly be said or presumed to exist in an increasing volume of circulation.

This is why I have distinguished the terms ― *necessarily* referring to the former as “circulatory inflation” and to the latter as “price inflation,” *because* circulatory inflation cannot truly be said to *cause* price inflation.

IMPORTANCE OF UNDERSTANDING PRICE INFLATION

Nonetheless, as price inflation is certainly of vital concern (it, itself could engender terminal failure), it is important indeed to understand its causes (if any); and so it is important for us not to mis-understand its actual cause (if any), because anything less precludes successful self determination in any form of representative government.


ONLY IDENTIFIABLE CAUSE OF PRICE INFLATION


As MPE demonstrated over 40 years ago, the only systemic cause of price inflation is the present obfuscation of our promissory obligations to each other (as opposed to the proposed explanation, relating instead *only to the material* upon which evidence of our promissory obligations is published).

Why?

Because we do not really borrow money from banks; because the obfuscation of our promissory obligations to each other falsifies these obligations to pay and to retire principal from circulation into a falsified debt to the purported banks (the “central bank” of which merely assumes the negligible costs of publication); and because finally, no rightful risk or claim to interest exists in this usurpation of the people’s right to issue their promissory obligations free of the resultant terminal exploitation.

All of the systemic consequences we presently experience emanate from this obfuscation, because it imposes the only systemic processes and ramifications of this imposed system of exploitation.

By modeling any case of issuance then, we readily understand and identify with certainty, the only *actual* systemic cause of price inflation:

Owing to this obfuscation of the currency, it is necessary *always* to maintain a vital circulation, or circulatory deflation makes it impossible even to continue servicing the initial debts, because we are obligated to pay principal *and interest* *out of a circulation which can at most be comprised of *some* remaining principal*.

Yet of course then, it is impossible to maintain the vital circulation (under any practical implementation of the system) but by re-borrowing principal we pay out of the general circulation, with this re-borrowing of principal comprising new sums of debt equal to the former sum of debt ― and thus making it mathematically impossible to pay down the sum of debt.

Similarly then, as what interest we pay out of the general circulation and must borrow back into circulation to maintain a vital circulation comprises new debt above the former sum of debt, therefore the sum of artificial (falsified) indebtedness increases by so much as periodic interest on an ever greater sum of debt. The sum of artificial, falsified debt therefore inherently increases even at an inherently escalating rate of ever greater sums of periodic interest on an ever greater sum of debt, until we suffer a terminal sum of debt which exceeds our ability to service it. It is this inability to service the terminal sum of debt too which in turn destroys our credit-worthiness to borrow further ― thus destroying our capability to maintain the vital circulation by further borrowing.

The latter fact too explains how and why federal over-spending is the only (general) means of artificially maintaining a vital circulation so long as the terminal system can artificially be sustained at the brink of terminal failure.

Nonetheless, we note all this while of inherent, irreversible, and therefore terminal multiplication of artificial indebtedness, that ever more of the circulation is inherently dedicated to servicing the escalating sum of artificial debt, leaving ever less to sustain the industry which is obligated to service this artificial debt. This manifestation of what I have so long called “maldisposition” of the circulation yet reflects a further thing ― that the costs of servicing the escalating sum of artificial indebtedness inevitably fall upon industry… in turn forcing industry to increase its prices, or suffer compromised margins of solubility.

Thus we readily understand (contrary to this article) that the only *actual systemic* *cause* of price inflation in fact is interest, as imposed by the present obfuscation of the currency.

FURTHER FALSIFICATIONS OF THE RELATED ISSUES

But the article and further purported authorities claim we suffer circulatory inflation; and a further potential impropriety of the submitted arguments therefore is the question of *whether* in fact *we even suffer* purported circulatory inflation (which these people merely *call*, “inflation”).

When I first disproved the mere proposition that circulatory inflation *caused* price inflation, I first asked the “economics” teacher, “Being as you tell us all debts are collateralized, first of all, how is it *even possible* to suffer [circulatory] inflation then?”

He turned red, and soon admitted, “By God, I think you’re right.”

(Understanding that I was suggesting it is impossible to suffer circulatory inflation if we merely collateralize debt.)

But do we actually suffer circulatory inflation (as even a *possible* purported cause of price inflation)?

The folks who claim so provide no math. They simply claim whatever is being poured into circulation amounts to “inflation” (circulatory inflation).

It is upon this further mis-conception that they merely presume a cause of price inflation. But from our simple analysis of the ramifications or inherent life cycle of the obfuscation of our currency we understand another thing: Purported circulatory inflation *can only exist* not as a consequence merely of what is being poured into circulation, but instead, only if the remainder of what is being poured into circulation *less what principal and interest are being paid out of circulation* exceeds increases in industry/commerce.

In sum then, the claimed circulatory inflation is impossible if the debts are truly collateralized; no legitimate claim to circulatory inflation exists in decrying what ever escalating sums of principal and interest are being loaned back into circulation (in fact on the contrary, to claim this as “inflation” is strictly to the discredit of purported authority); and *nonetheless* NO CAUSE OF PRICE INFLATION EXISTS IN CIRCULATORY INFLATION: ON THE CONTRARY, THE ONLY IDENTIFIABLE CAUSE OF PRICE INFLATION IS INTEREST, IN THE PRESENT OBFUSCATION OF THE CURRENCY.

People for Mathematically Perfected Economy

https://www.facebook.com/groups/pfmpe2012/

http://www.perfectedeconomy.org

4 thoughts on “Inflation/Deflation Explained (Myths Debunked)

  1. Ik snap het en toch heb ik moeite met het te begrijpen.😉
    Hoe weet ik dat? Omdat ik het een ander nog niet kan uitleggen.
    Kan het dus ook niet tweeten.

    Is er misschien een Nederlandse versie van deze tekst?

    Alvast bedankt.

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