Your House and Your Mustard

For as long as I can remember I whip up my hot mustard fresh from powder (cold water makes hot mustard), and have found Colman's a good brand of mustard powder to use, although bulk purchase is fine.  At Safeway in the spice aisle I gasped to see a 4 oz can of Colman's nearly $10!  Very odd, I recall from a few moments and aisles before that a 4 oz jar of hot prepared mustard was $1.79.  Hang on, powder is supposed to be cheaper than prepared,  like one fifth the price, not powdered five times as much!  This is chaos! What is going on?  What is going on is an excellent example of how inflation, and deflation, works.

First, inflation and deflation are strictly monetary events.  Then we immediately run into the problem of "how do you define money?" but for the purposes of illustration on this one point we can use the looser definitions without wandering into error.  In any any event, inflation is too much money, deflation is too little money, both monetary policy events.  Price increase is not necessarily inflation, nor is price decrease necessarily deflation.  For example, prices can increase in a disaster, and prices can decrease through efficiency, and neither is a monetary policy event.

Current circumstances also illustrate how inflation and deflation can be simultaneous and category specific, for example, how at the same time there can be deflation in housing, there can be inflation in food.

Credit mimics money, although it is not money.  Credit destruction is a mimic of money destruction, so it looks like deflation.  Housing is built on credit.  Credit is destructing, so housing prices are falling.

Food is based on cash.  Money markers (look-alikes) are being created, so prices are rising for cash things. (I know you pay by credit card, but credit cards get paid in 30 days, houses in 30 years.)

Now the trick of the FED is to fund bankers while taxing the middle class into oblivion.  How? Through creating "money."  You need to know how this works, how they nail you without you knowing, boil the frog slowly.  Whether you agree with the system or not, this is how it works.

Say today there are one million units of money, and bread costs 2 units.  And tomorrow the government doubles the amount of money, then eventually, all things being equal, that loaf of bread will double in price to 4 units.  Everything will double in price to absorb the new money. All things being equal, what would be the point?  It is all in the word eventually.

When the banks get the new money, they pay off their debts at the old prices.  OK, but what happens to the newly created money? It is still extra. The new money has not made it to you yet, the effect has not reached your loaf of bread. The new money, introduced at the banking level, will eventually make its way to you, in the vehicle of your paycheck.  But that money is filtered in first at the level of banks, then mines, fisheries and farms, parts manufacturers, finished goods manufacturers, retail and then last but not least, you. All along the process, those transactions absorbed more units of the funny money introduced earlier, raising prices as more money units were applied to the same portions in trade.

That filtration, over time (that word, eventually) means that the money that was created has been absorbed in all of those previous transactions and has resulted in the prices rising in those lower order goods, and eventually surprising you at the retail store, where you buy the higher order goods.  Fresher, faster turning, lower order 4 oz mustard powder is $10, and higher order prepared mustard 4 oz jar, in a jar and slower turning is $1.79.  This is precisely backwards!

Lower order powder packaged last week reflects the higher new costs, whereas the higher order prepared mustard packaged last year reflects the older costs of ingredients.  There are not many products offered in these two forms at retail, so it is a fairly unusual, but illustrative, example.

You can see the process in any Safeway.  When they do another mass run of prepared mustard at the new prices for raw materials, expect "mustard in a jar" prices to sky rocket.  Then it too will either be same price for lower sized jar, or inferior materials used (perhaps recycled Fukushima waste masquerading as mustard, as recycled aluminum smelter toxic waste is recycled as fluoride in USA water systems?)

For now you can see the price rise in the lower order goods making its way to the higher order goods.  Almost all of your purchases are of higher order goods, so you eat the loss from inflation, literally.  For the banks and big-biz/big-gov, inflation, this ruse, is a tax on the middle class that they cannot quite perceive.  Want to raise taxes on the middle class without a vote?  Create more money.

At the same time housing prices are falling.  It is a neat trick, because odious credit behaves like money substitutes.  As credit is destroyed, there is less credit to go around, so people accept less credit to cover the cost of a home, thus it takes fewer credit units to buy a home.  They talk "price" as if in money, but the real estate agent, buyer and banker mean credit.

So on one hand you must pay higher prices in the grocery store to fund the banks, in order that the bankers may be kept whole as the one largest investment in life, your home, goes disastrously down in value.  In a fascist state, the bankers must be immune to all risks.  So as they lose money with you on their stupid loans, only you must make them whole by paying too much at retail.

Your paycheck, pension and property are forfeit, and there is nothing you can do to stop that, except give them up, the sooner the better.  You will get more for them now than later. Then you secede in place by getting self employed.  It is your only defense.

Bookmark this post --- Email this post