A very interesting analysis of the end run effects of inflationary policy (ie: over abundant money creation) and the road that follows for an infected economy.
“History is replete with Great Disorders in which social cohesion has been undermined by currency debasements. The multi-decade credit inflation can now be seen to have had similarly corrosive effects. Yet central banks continue down the same route. The writing is on the wall. Further debasement of money will cause further debasement of society. I fear a great disorder,” Grice wrote in a note outlining why he is so worried about central bank policy and its cheerleaders.
Likening the printing of money to a stealth tax that erodes people’s spending power without anyone being able to place the blame for their loss of purchasing power, Grice said people need to blame someone.
“No one knows upon whom the burden falls. People notice only that they can’t afford the things they used to be able to afford, or they can’t afford the things which everyone else can afford.”
“They know that something is wrong, but they just don’t know what, why, or who is to blame. So inevitably they look for someone to blame”
Grice believes that the cost of currency debasement falls on those who do not benefit from the debasement when it occurs and believes people are finally waking up to this fact.
“Central banks provided cheap money to banks, the cheap money artificially inflated asset prices, artificially inflated asset prices made anyone connected to those assets rich as we became anation of speculators, those riches were achieved at everyone else’s expense, and everyone else has now realized what has happened and is understandable enraged,” said Grice who believes we are now locked in a blame game.
“The 99 percent blame the 1 percent, the 1 percent blame the 47 percent, the private sector blames the public sector, the public sector returns the sentiment, the young blame the old, everyone blame the richyet few question the ideas behind government or central banks.”
“I’d feel a whole lot better if central banks stopped playing games with money. But I can’t see that happening anytime soon. The ECB has thrown the towel in, following the [Swiss National Bank] last year in committing effectively to print unlimited amounts of money for the greater good. The [Bank of England] and the Fed have long since made a virtue of what was once considered a necessity, with what was once the unconventional conventional.”
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