“The U.S. Energy Information Administration (EIA) released its weekly data on diesel and gasoline retail prices for the week ended November 23. Gasoline prices fell by 0.9 cents per gallon, while diesel prices rose by 2.1 cents per gallon. Retail prices for gasoline averaged $2.102/gallon.” (fuelsmarketnews.com, Nov. 24, 2020)
“The current national average price of gas is $3.61 a gallon, up 26 cents from February and roughly a dollar from a year ago, according to data from AAA. In U.S. states with the priciest fuel, motorists already are paying nearly $4.50 a gallon, according to price tracker GasBuddy.” (cbsnews.com, 5 hours ago)
US AVERAGE MILK PRICE PER GALLON (FRED, fred.stlouisfed.org)
Dec 2018, $2.85
Dec 2019, $3.18
Dec 2020, $3.53
Dec 2021, $3.74
Above are two examples of price changes on gasoline and milk over the last 2-4 years. Obviously, the prices (especially gasoline) are affected by many different factors, but a large part of the increase represents the result of inflation. Gas went from an average of $2.10 in Nov. 2020 to $3.61 or more currently (March 3, 2022), which is an icrease of $1.51 or 72% over about 16 months. Milk went from an average of $2.85 in Dec. 2018 to $3.88 currently, which is an increase of $1.03 or 36%.
Inflation means that there is an increase of the money supply. If a counterfeiter prints money, they get put in jail. But the government is somehow exempt, so they go ahead and print extra money whenever they want to. When there are more dollars, each dollar is worth less. Your dollar won’t buy what it used to. Prices go up—but not all at once. Here’s why:
The federal reserve doesn’t usually spread the freshly printed money evenly, like a blanket covering the entire United States. Instead there are usually certain points of “injection”. These points of injection are usually types of government subsidies to corporations, military spending, medical industries, and so on. The new money raises prices starting in these areas (where there is now more money to spend) and spreads through the economy from there. This usually leads to the “Wage-Price Spiral”, an effect of inflation. It is important to recognize that the source of inflation is not the Wage-Price Spiral, but the increase in money issued by the government.
Because of inflation, the rich and favored elite get richer and more powerful, while the middle-class and poor lose their purchasing power to the elite. Here’s the worst part: When a form of money (such as gold or gold-backed currency) is not inflatable, the government is really limited in warfare spending—if they want more money for the war, they have to raise taxes, which will probably irratate most citizens. However, when the government can inflate (indirectly tax) on demand, they are almost unlimited in their wartime spending.
Actually, there is a limit. This natural limit is called hyperinflation. Once people realize that their money is becoming more and more worthless every day, they start spending it—before it gets more worthless the next day. This magnifies the inflation. Prices rise even faster, and the government has to either print more money until they can’t keep up, or let the economy collapse. The more they drag it out, the worse the collapse will be.
Currently in the United States, we are probably near the hyperinflation stage. Inflation was reported at about 7.5% in Feb. 2022, and that’s probably a very low estamite. So, what can we do? Most importantly, we can build our faith in God and commit ourselves to following His commandments. He cannot bless this nation if it continues in wickedness. Other than strengthening our spiritual foundations, we can build up a supply of food and water, try out alternate currencies such as Bitcoin or Goldback (https://goldback.com), and maybe even buy some silver or gold.
We have a lot of great resources to prepare for what might be coming—so let’s use them! Learn about the history of inflation. Look at countries that have previously experienced hyperinflation and learn from them. Be prepared. We should be wise optimists. In other words, we should become informed, accept the reality, and then make the best of it, cheerfully doing all that we are able to improve the situation.