No inflation and no crises

Inflation Creative Society

Inflation is a steady rise in the general price level, not due to improvements in the quality of goods and services, over a period of time.

Where will inflation go?

Inflation is characteristic of a consumer society, in which it is assigned the role of spurring consumption and increasing demand for goods and services in anticipation of the depreciation of their savings. In a Creative Society, there would be no inflation due to the absence of causes that cause it (see table).

Table. Absence of causes causing inflation in a Creative Society.

The causes of inflation in a consumer society      Why it won’t happen in a Creative Society
1 The unjustified issue of money
This is an extraordinary measure, even for a consumer society. The state resorts to it in wars, conflicts or other global crises
In a Creative Society, wars and crises are excluded
2 The excess of public expenditures over the amount of budget revenues

This is possible either at the expense of foreign loans, or at the expense of the issue of money. In either case, the mass of money in circulation increases. When loans are borrowed, there is also the need to repay interest on their use

In a Creative Society, all current international debts would be cancelled and countries would be united. Such unification does not mean the obliteration of borders and the disappearance of states: culture, traditions, and borders will be preserved. The unity of all nations is necessary for an equal and just redistribution of resources, which should belong to humankind as a whole, not to any one nation. With such a distribution of resources, there is no one to borrow from (except extraterrestrials) and no reason to: the amount of resources available on the planet will not change.
3 Rising prices for raw materials and energy

The expectation of higher prices for raw materials leads to an advance increase in the price of manufactured products in order to be able to subsequently purchase higher-priced raw materials

In a Creative Society, prices are stable and fixed for all kinds of goods and services. Inflationary expectations are eliminated.
4 Decrease in the volume of production at the national level
A fixed volume of money in circulation, with a decrease in the quantity of goods, works and services leads to their objective appreciation, as the amount of money per unit of produced values becomes more. This type of inflation is associated with shortages of goods and services
A Creative Society creates conditions for the growth and development of all spheres of activity, and the economy is planned. Not to be confused with the planned economy of the USSR! Planned means providing for the needs of the population and business and eliminating disproportions in the structure of production, leading to shortages of certain goods.
5 The monopoly of producers, which allows them to manipulate prices, especially in the resource industries In a Creative Society, all strategic and vital industries and facilities must be owned by society itself, so as to exclude the possibility of monopolization. This applies to the fields of energy, finance (banking sector), mining and extraction, transportation, medical equipment and pharmaceuticals, and all strategic enterprises.
6 Union monopoly, demanding higher wages With wages roughly the same all over the world, with an equal amount of unconditional basic income and fixed prices the same all over the planet, in a Creative Society there is no need to fight for higher wages and to upset the balance in the circulation of money.
7 Increase in taxes and excise duties
Increasing taxes in order to replenish the country’s budget leads to an increase in business expenses and, consequently, in prices
In a Creative Society, taxation is economically sound, stable, and kept to a minimum.
In a society in which the highest value is the individual, everyone understands from whose pocket all taxes are ultimately paid. Any actions and measures aimed at worsening the conditions of human life are unacceptable.
8 Increased duties on imported goods In a Creative Society, borders between countries are nominal. Countries come to the necessity of a unified economy. The customs service is abolished, along with all duties, fees, and excise taxes.
9 Excessive lending, which comes not from available savings, but from issuance In a constructive society there is no usury, there is no need to attract credit. We will consider this question a little further below.
10 Decline in the exchange rate of the national currency This reason in a Creative Society is excluded in view of the gradual transition to a single monetary unit worldwide.
11 Risk Hedging
Hedging instruments: futures, forwards, swaps, and options are used by investors to shift the risk of an unwanted price change to those willing to accept it. As a result, the market is artificially inflated and speculators profit by assuming the risk. All of this leads to inflation
In a Creative Society, when prices are fixed and equal throughout the world, there are no such risks and no need to insure them. The market becomes real and prices adequate and fair by eliminating the speculative layer and financial intermediaries that now exist.

So how can we be manipulated?

In the old days, all economists at universities were taught that moderate, or creeping, inflation of up to 10% a year was good for the economy, because it stimulates its development. Now they went further, covering the entire population of the country: it is now written in school textbooks on social studies. Every child learns from childhood that inflation is not an evil, but a good thing, if it is managed properly. Why is it done, who benefits from it, and who is the main manager?

Above in the table we have described the causes of inflation, traditionally listed in textbooks. At first glance, everything seems logical. However, this cleverly hides the main cause of inflation – credit and interest charges.

Inflation is characteristic of the consumer society, which is financed and expanded primarily through credit. Every business either starts with borrowed funds or raises them during the expansion phase. The interest charged on the loan increases the costs of businesses. Undoubtedly, this leads to higher prices. Higher interest rates are one of the main causes of inflation.

The owners of finance also manipulate the population. How many times a month do you receive sms with an offer of credit, with a notice of an increase in the credit balance on the card, etc.? Our society is forced to live on credit, which has long been the norm in the West.

By making credit available, a mysterious someone is killing two birds with one stone:

1) Earns interest on consumer credit;

2) Encourages the demand for goods, works and services, making them more affordable to the public. This, on the one hand, causes a gradual increase in prices and, on the other hand, stimulates the producer to expand business and increase production. In its turn business comes to the necessity of additional borrowed funds which means that again it is possible to earn on interests.

Such a chain passes to the interbank level, where overnight loans are practiced, and to the interstate level, leading to the emergence of the country’s external debt. The latter loans are more deplorable for the society, because they directly influence the inflation rate in the country.

It is enough to have a large sum of money to manipulate the whole world by pulling the necessary strings in the form of tranches, rates, etc.

At the same time, price regulation is considered evil – everyone immediately points to the Soviet Union with its hidden inflation, caused by commodity shortages, but they forget that this deficit arose due to the skewed economy in the direction of the military-industrial complex. In a Creative Society there will be no need for military expenditures, the customs apparatus and other power structures. The main demand for manufacturers would come from the population, since even business and science would be oriented only toward human and social needs.

Let us trace once again the existing today’s chains:

  • Affordable credit for the population – increased demand – rising prices – attractiveness of production for entrepreneurs – the need for loans for businesses – increased costs due to interest on loans – rising prices;
  • High interest rates on consumer loans + additional expectations and fears of the population – holding on to the money available to the population – reduction in demand – forced reduction in prices to attract the buyer (our favorite promotions) – reduction in production – excess demand over supply – price growth, etc.

Inflation has a ripple character and is skillfully managed with the help of financial instruments.

That is why our children are taught in social studies classes that moderate inflation is necessary for the development of the economy. In this case, the word “development” is unreasonably understood as simply the growth of GDP, or the monetary expression of the goods, works and services produced. This completely ignores such a consequence as an overproduction crisis and the possible collapse of the entire economy.

Do you know why deflation (a steady decline in prices) is considered undesirable? It hits banks and financial institutions. It then affects businesses, and after that it affects the population, on whom all the lumps in the consumer society fall.

The Central Bank website https://www.cbr.ru/ states that the bank is aiming for an annual inflation rate of 4%. Despite the fact that regulating inflation is not a function of the Bank of Russia, it has all the means at its disposal to restrain or stimulate price increases.

This brings us to the popular phrase: “He who pays the piper calls the tune.” A thinking person will see behind this much more than we have allowed ourselves to write above.

For this reason, in a Creative Society, banking, along with other strategic industries, must be in the hands of society itself. Usury is excluded in a Creative Society. Banks will be left with the functions of current services and transactions.

In a Creative Society, people would have no need for credit, because everyone would receive an unconditional basic income and a decent wage, everyone would be provided with free housing, which is considered traditional for the area, and education and medical care would be accessible and free of charge. Everything else can be earned. The 16-hour work week easily allows for that.

Businesses can raise funds on partnership terms for new projects, as is now practiced in Islamic banking – usury is forbidden in Islam.

Thus, in a Creative Society the main cause of inflation and the main way of manipulating the entire population of the planet is eliminated – the fee for the use of borrowed funds.

A little more on manipulation

In addition to “boosting” the economy in the form of demand stimulation, economists justify the need for inflation as follows:

1) Reduces real income by forcing people to work better

Isn’t this supposed to be an incentive to work? Isn’t a person entitled to freely dispose of what he has honestly earned, rather than being under constant control and pressure from those with money?

According to Rosstat, the inflation rate in the Russian Federation:

in 2020 – 4.9%; for 5 years – 22%;

in 2019 – 3%; in 10 years – 84.3%.

2) It redistributes income between lenders and borrowers in such a way that the borrower benefits by giving up an amount whose real purchasing value is less

This is another common argument used to force another loan on us. Why then does no one care about the world’s population, whose earnings and savings are constantly depreciating? People are forced to look for ways to protect their savings, either by investing in tangible assets or by putting interest in banks. All of this again leads to the expansion of credit opportunities, driving up inflation and providing a reliable income for the owner of the money. It is very convenient to redistribute financial flows without creating anything, so that at each sale and transaction part of the money goes into your pocket, under the guise of good intentions.

3) Acts as “natural selection,” leaving only the most viable businesses

Viable or adaptable? The consumer society prioritizes power and force, the creative one humanity and justice. Enterprises which are good for society and produce a quality product should work. In a Creative Society no financial leverage is needed to determine the viability of an enterprise – recognition and love of the customer is enough.

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