The state cannot regulate purchasing power

The state cannot regulate purchasing power

Posted on July 24, 2022




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The government works on the belief that it will improve purchasing power after the re-emergence of inflation, as if the law had miraculous power to change the rules of the economy.

Here are some clues that don’t seem to be that much in the eyes of our media.

The government and parliament cannot improve the purchasing power of the French

It is therefore surprising and disturbing to note that for several weeks all the media and politicians accepted the concept of this improvement as if such power had been obtained, and that it was now sufficient to choose how to implement it.

This demonstrates the alarming economic ignorance of all commentators. During his July 14 interview, the president tried to back off if possible “City Council in the middle of the village” As he put it, mentioning a point that has unfortunately not been developed and constitutes the second proof.

The purchasing power of the French comes exclusively from their work

To improve purchasing power, they simply need to work more, or improve their productivity, which is not done in five minutes, and requires large investments.

The other two optimization methods, which I mentioned in my last article, do not actually create additional purchasing power:

rob Peter to pay Paul

This verbal statement perfectly illustrates the immorality of this method which consists of taking purchasing power from some to improve the power of others. This method is in profound contrast to Articles 2 and 17 of the 1789 Declaration of the Rights of Man and of the Citizen, and also poses a fundamental problem: Who can claim the almost divine right to designate who should pay and who should receive? This question has always been answered by the left of the political spectrum: those who belong to the category of the rich should give, and others take. Knowing who falls into the category of the rich remains the exclusive domain of politicians. (We didn’t expect any less from them). The amount of contributions is determined by the distribution amount to be guaranteed, which is called here redistribution, indicating that predistribution has already taken place. The mystery remains about how much and when.

There was a similar system that drew its justification from Christian ethics: love. But with the slight difference that the donation was voluntary.

KoiKilEnKoute

It is the first alternative. It consists of borrowing the amounts to be distributed, the amount of the loan cost (interest) that is normally charged to the current taxpayer, and repaying the principal amount (the interest-free loan amount) to the future taxpayer. Thus, it also amounts to Pierre (the taxpayer) undressing Paul (the Beneficiaries).

This is how the so-called law of purchasing power will be applied. Nobody talks about where the money comes from, and that’s exactly the problem.

Some politicians (always on the left) have certainly been deceived by the presentation of the national budget which clearly respects accounting assets, and may have thought, perhaps by studying the nation’s accounts quickly, that a loan does not imply any out of money when interest rates were zero or negative, and thus could be Unlimited. Others, such as Jean-Luc Melenchon, sadly inspired by the behavior of the Bolsheviks of their time, believe that not paying off loans is a good way. They just forget that lenders may remember it when they are called back after spending the loan amount.

However, with the exception of the authors of these deceptive inferences, the majority of sane people seem to agree that the KoiKilEnKoute method is dangerous, because it appears to solve a problem when it simply amounts to converting the bill payment by making it heavier than the loan fee. It’s strange and disturbing not to raise a voice about it.

The government and parliament produce nothing

If the money they distribute does not come from a tax on the taxpayer’s income or assets, it can only come from a loan. However, even if you borrow at an affordable rate, you will have to pay back one day, and the later you pay off, the more expensive the process will be. Those who want to convince you otherwise are irresponsible. This very simple and easy to verify fact is unfortunately not clearly stated by the government (but we can understand), but also by the media, which does not play the role of informants who attribute it to themselves.

On the other hand, KKEK amounts to making money. In fact, commercial or central banks have such power which can be described as exorbitant, when they open credit to a person, company or country. At the moment of this opening, the total amount of money is increased by the amount of credit.

But since the process does not involve any simultaneous creation of value as in the case of manufacturing a product or providing a service, we come to the fourth proof.

Opening credit creates inflation

The general public in general and the media in particular confuse two different phenomena with the name inflation Noticeable increase in prices.

However, this phenomenon is actually only result real hypertrophy. This is actually formed by the decrease in the purchasing power of the monetary unit because more Euros are needed to buy the same commodity. This confusion comes from the way this inflation is evaluated: since it is not possible to know the exact amount of money in circulation, nor the total value of purchasable goods, the measurement of inflation occurs indirectly and imperfectly by determining the development of certain prices and assigning a certain weight to them in order to arrive at A satisfactory figure for monetary authorities. INSEE is a great specialist in this type of calculation, and it is clear that it is subject to caution, as it allows all the drifts.

The harmful consequences of our politicians’ decisions

Distribution of magic coins as described in the law being drafted proceeds from the famous KoiKilEnKoute established by the president himself.

France’s unenviable situation with regard to public debt is further exacerbated. The emergence of permanent inflation, which was initially denied by Madame Lagarde and Minister of Economy and Finance Bruno Le Maire, who was then declared short-lived by the same people, is a direct consequence of this obedient application of this KoiKilEnKoute during the Covid crisis by European governments under the influence of our President. The alleged causes of this inflation, widely publicized as the war in Ukraine, are not accurate, but they are of course widely accepted because they identify a suitable person in the position of Mr. Putin. It is a practice universally used in history to designate a culprit when good people encounter a bad event.

The events involved are complex and the relationships between them are very diverse.

Yes, Mr. Putin is responsible for the outbreak of hostilities against Ukraine. But the situation of Europe’s complete dependence on gas is not of his making. It makes sense that he is taking advantage of the situation. Russia’s strength lies in its position as a supplier of indispensable fossil resources. We cannot blame the fort for its strength. This situation should have been considered before, because all the problem data were already known.

Moreover, let us remember the moratorium on the exploitation of shale gas in France that was voted on by our deputies in 2011 and confirmed in 2013 by the Constitutional Council, which practically banned the exploitation of this source of energy while the French subsoil reserves were estimated by the US Energy Information Agency would give us 80 years of Current consumption (source). France is currently buying US shale gas rather than exploiting its own reserves. We don’t really see the merits of this position. On the other hand, the flaws are obvious…

These observations lead us to conclude that the politicians have again failed in the task of looking ahead, simply taking appropriate measures to ensure the safety of the French people. This blunder should raise questions about other actions that the same energy and climate policies want to impose on us: they have just shown us how wrong they can be in their assessments of risks. It would be helpful not to let them make the same mistakes again.

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