|by Anthony Migchels|
“In a word, knowing by the experience of many centuries that people live and are guided by ideas, that these ideas are imbibed by people only by the aid of education provided with equal success for all ages of growth, but of course by varying methods, we shall swallow up and confiscate to our own use the last
scintilla of independence of thought, which we have for long past been directing towards subjects and ideas useful for us.”
Protocol Nr. 16
“The Power of Ideas will prevail!”
Intellectual dishonesty is the hallmark of the leadership of Austrian Economics. Nowhere is this more palpable than with their disingenuous, dishonest and destructive defense of deflation. Now that we are facing the greatest deflationary bust since the Great Depression, with the worst still to come, Austrian Economics rises as the main defender of the Money Power’s onslaught.
Time to dispel their lies and misrepresentations concerning deflation point by point.
One of the key weaknesses of Austrian Economics as a philosophy/pseudo science is its reliance on deductionism. However, while this may be a weakness in terms of truth-seeking, it is major asset in terms of its real purpose: mind controlling the masses, wearying of Keynesian gatekeeping. With fuzzy ‘logic’, which by its nature suffers from the bullshit in, bullshit out dilemma, it is easy to obscure the obvious. Mind Controllers are fully aware that the brutish Goyim mind is not interested in facts and careful observation. It is interested in the power of ideas. And when one idea fades in the face of practice, it easy to conjure up a new one to keep the antfarm busy.
Harsh words? Extensive experience in debating Austrian Economists have shown time and again that they are absolutely not interested in promoting learning. They are interested in promoting their case. A case, as Real Currencies and others have documented extensively, the Money Power created out of nothing solely for its own purposes.
Considering the fact that defending deflation amounts to nothing less than defending the Money Power’s obvious attempts to create an uprecedentedly severe world wide depression, there is every reason to reject their inane ‘theories’ vociferously.
The more so, because history clearly shows that depressions like these are used by our self declared masters to soften up resistance against large scale ritual murder, also known as World War.
So scolding Austrian Economics and its leaders does not imply disdaining the many people who have found the courage and the independence of thought to reject the obvious failures of Mainstream Economics. They are the seekers, inadvertently walking into the trap that the Money Power prepared for them with great effort and discipline.
Let’s hope that debunking Austrianism helps them to seek further and others to avoid falling for it altogether!
So what again is deflation? There are two definitions: a contracting money supply and declining prices.
The first definition is the classical one and best. Declining prices often are a result of a contracting money supply, but not per definition.
The real issue is the contracting money supply itself, which is associated with busts. Every major recession or depression in recorded history was associated with a contracting money supply.
And yes: Austrian Economists try desperately to obfuscate this fact, as we will see.
What the Austrians ignore and don’t want you to know
Of course! It’s the power of an idea, it has little do with facts based in real life. Just imagine: defending deflation in the face of the destruction in Greece, where the money supply is contracting at a rate of 10% per year and the economy with a whopping 7%. And while Greece is probably the worst case for the time being, it’s happening all over the West, including in the US itself. Real unemployment in the US is at 20%. Why? Because the money supply is tanking:
This is the simple truth, but all the Austrian Economists and Gold Dealers parading as the ‘alternative media’ have been scaring us to death with their hyperinflation fearmongering.
So this is the reality of deflation. Defending it means defending Greece. Few would do that, if they realized what they were actually doing.
2. During deflation, the value of debts increase in real terms.
Does that sound like a good idea when the whole planet is swamped in debt? Of course, the problem is compounded by the fact that interest payments also rise in real terms.
Debtors are the great majority of the population. Creditors the small minority. Austrianism is famous for defending the rights of creditors and capital in general. This shows in their defense of deflation also. Only the rich benefit from deflation.
Their outright lies
1. Deflation is declining prices. Great, right?
This is a lie, not because this definition is not fairly widely used, but because Austrian Economists define inflation as a growing money supply. So this is a clear ‘inconsistency’, but just a little too comfortable for them not to be considered an outright lie.
Often those mentioning this will say: prices decline because of technology. Rothbard was famous for this nonsense. Sure they sometimes decline because of technology. For instance cell phones and computers. But that has nothing to do with deflation in the real sense of the word and Austrian Economists know it. How do I know they do? Because they continue this nonsense, even when corrected.
2. Depressions are not associated with deflation
This is so incredibly stupid it hardly is worthwhile mentioning it, but it is a good example of how far these people actually go in hiding the obvious. Not only does it fly in the face of what has been common knowledge for ever, most certainly in the United States, their proof is most telling. They offer this study….by the Federal Reserve.
Now consider this: they made a name for themselves by exposing the Fed’s and Mainstream (Keynesian) Economics’s downplaying of inflation and the associated manipulation of volume, and then, when it comes to deflation, they use a study by the Fed ‘proving’ there is ‘hardly a relation between deflation and depression/recession’.
3. Their ‘misunderstanding’ of the business cycle
Yes, Austrian Economics is wrong about the business cycle, their main pride. Their heroes Mises and von Hayek noted that busts usually were preceded by booms. Booms caused by ‘too lax’ credit by the banks. This results in overinvestment, or ‘malinvestment’ after which a corrective bust is unavoidable.
In this way Austrianism actually makes people call for the bust to happen as soon as possible: the longer it is postponed, they say, the worse it will get. This is not entirely untrue, but considering the easy way deflation can be managed, it amounts to having people call for their own destruction unnecessarily.
Also, with this explanation they igore the fact that an interest bearing money supply MUST grow, to finance ever higher interest costs to society, fueled by the growing money supply itself. Or, as with a Gold Standard, face structural depression, due to ever smaller money left for real trade because the money supply cannot grow.
This is the famous P + I > P formula as put forward by Mike Montagne, where P is Principal and I is interest. It explains why money is always scarce when taxed with interest.
Worse still: despite this inherent flaw of interest on the money supply, the real problem is that the Banking Fraternity manipulates the volume willingly and knowingly. The Boom/Bust cycle as we know it is a completely artificial phenomenon, that would even occur, would the Money Power stop charging interest. The point is that during a deflation they are the only ones with cash, enabling them to buy everything up that the populace at large is selling at fire sale prices in a desperate attempt to get out of debt.
By hiding this fact, just like Mainstream Economics does, Austrian Economics just exposes itself as controlled opposition.
In the face of the horrible destruction that the Money Power is visiting on the entire world with its ‘credit crunch’, its valiant knights known as Austrian Economists keep the gates against the real opposition clamoring for reflation.
Reflation of the economy, not by handing over trillions to busted banks, but by an interest strike or even just handing out interest free credit or debt free money to the population (which is Social Credit) would easily solve the depression overnight.
But that would be ‘inflation’. With fiat money! Statist violence! Oh horror of horrors! That would certainly rob the rich of the CHOICE, LIBERTY and FREEDOM to choke us by withholding credit! How dare we!